CALABASAS, Calif., Feb. 28, 2011 (GLOBE NEWSWIRE) -- DTS, Inc. (Nasdaq:DTSI) today announced financial results for the fourth quarter and fiscal year ended December 31, 2010.
For the fourth quarter of 2010 revenue increased 27% to $26.9 million, and net income from continuing operations was $6.1 million, or $0.34 per diluted share. This compares to revenue of $21.2 million and net income from continuing operations of $4.9 million, or $0.27 per diluted share, reported in the same period of 2009. Included in fourth quarter of 2010 results is $1.6 million, or $0.05 per diluted share net of tax, in stock-based compensation expense and $320,000, or $0.01 per diluted share net of tax, in amortization of intangible assets. In addition, fourth quarter of 2010 results include $654,000, or $0.02 per share net of tax, in restructuring charges related to the pending closure of a Canadian subsidiary and the wind down of certain activities in Japan.
The Company achieved non-GAAP operating margins of 47% and non-GAAP income from continuing operations of $7.7 million, or $0.43 per diluted share net of tax, in the fourth quarter of 2010, excluding the above-mentioned charges. This compares to non-GAAP operating margins of 47% and non-GAAP income from continuing operations of $6.0 million, $0.33 per diluted share, reported in the fourth quarter of 2009.
"The fourth quarter was a strong conclusion to a great year where we achieved revenue growth, excluding royalty recoveries, of 38%, reached $1.15 in non-GAAP earnings per share, and generated $39 million in cash from operations," commented Jon Kirchner, chairman and CEO of DTS, Inc. "Importantly during the year, Blu-ray became mainstream in most major geographies, and DTS HD Master Audio was the dominant audio format for high quality entertainment on Blu-ray Disc. We also made rapid progress in expanding our relationships in network-connected markets, bringing DTS technology to TV's, mobile phones, IPTV set-top boxes and other connected devices."
For fiscal year 2010, revenue increased 12% to $87.1 million, as compared to revenue of $77.7 million in the prior year. Excluding royalty recovery payments of $3.6 million in 2010 and $17.2 million in 2009, revenue increased 38%. Net income from continuing operations was $15.0 million, or $0.84 per diluted share, in 2010, as compared to $10.7 million, or $0.60 per diluted share, reported in 2009. Included in 2010 results were $7.0 million, or $0.24 per diluted share net of tax, in stock-based compensation expense and $1.4 million, or $0.05 per diluted share net of tax, in amortization of intangibles. In addition, 2010 results include $654,000, or $0.02 per share net of tax, in restructuring charges as described above.
For fiscal year 2010, the Company achieved non-GAAP operating margins of 38% and non-GAAP income from continuing operations of $20.5 million, or $1.15 per diluted share, excluding the above-mentioned charges. This compares to non-GAAP operating margins of 33% and non-GAAP income from continuing operations of $15.0 million, or $0.85 per diluted share, reported in fiscal year 2009.
The GAAP to non-GAAP reconciling items, for the quarters and years ended December 31, 2010 and 2009 can be found in "The Reconciliations of GAAP to Non-GAAP Financial Measures" attached to this press release.
During the year, the Company generated $39.0 million in cash from operating activities and closed the year with cash and investments of $101.4 million.
"With the growth in Blu-ray and rapidly expanding opportunity in connected devices, we are excited about our prospects for 2011 and beyond. We will continue to make focused investments to extend our penetration in networked-entertainment, which is expected to drive higher growth over the long-term.
"For 2011, we currently expect revenue to be in the range of $100 to 105 million, non-GAAP operating margins to be in the lower 40's, and non-GAAP EPS to be in the range of $1.40 to $1.49 per diluted share, excluding the impact of both stock based compensation and amortization of intangibles, and the estimated tax impact of those items. The company expects stock based compensation in the range of $0.32 to $0.34 per share net of tax in 2011, up from $0.24 in 2010 as a result of a higher stock price, expanding headcount and the initiation of a three year out-performance grant program tied to exceeding certain relative total shareholder return metrics. On a GAAP basis, we expect operating margins in the low 30s, and EPS in the range of $1.04 to $1.12 cents per diluted share," concluded Kirchner.
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, the amortization of intangible assets, and certain restructuring charges. 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, February 28, 2011
DTS will broadcast a conference call today, Monday, February 28, 2011, starting at 1:30 p.m. Pacific Time. To access the conference call, dial 1-877-941-4774 or 1-480-629-9760 (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 . 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 February 28, 2011 through March 7, 2011, by dialing 1-800-406-7325 or 1-303-590-3030 (outside the U.S. and Canada) and entering the pass code 4401284#.
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, China, France, Hong Kong, Japan, South Korea, Taiwan, Singapore and the United Kingdom. For further information, please visit . 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.
CONTACT: Investor Contacts: Erica Abrams or Matthew Hunt The Blueshirt Group for DTS 415-217-7722 firstname.lastname@example.org email@example.com Press Contact: David Blasucci Director of Marketing Communications DTS, Inc. 818-436-1080 firstname.lastname@example.org