Posts Tagged ‘DTS’

DTS Grows 41% in Q2; Offers Commentary on Competitive Environment

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Aug 18 2016

DTS reported revenue of $48.7 million for the second quarter of 2016, a 41% year-over-year increase over Q2 2015, and a 7.7% increase over the preceding quarter. logo

Revenue growth was driven by DTS’s acquisition of iBiquity in the fourth quarter of 2015.  iBiquity was a developer and licensor of HD Radio technology.

GAAP gross margins were 87.2% during the quarter down from the 92% gross margins recorded during Q2 2015 and also a decline against the 86.5% gross margins in Q1 2016.

GAAP operating margins were 19% during the quarter.  This compares favorable versus the same period last year when GAAP operating margins were 11% and the preceding quarter when GAAP operating margins of 4.0% were recorded.

On a GAAP basis net income for Q2 2016 was $4.7 million or $0.26 per share compared to net income during the year earlier period of $2.3 million or $0.12 per share.  Net income for Q1 2016 was $0.5 million or $0.03 per share.

Cash and cash equivalents ended the quarter at $43.8 million, up from $37.2 million at the end of the first quarter of 2016.

Revenue by Market Segment:

  • DTS’s Home division had revenue of $23 million during the quarter, down 5% against the second quarter of 2015. Management attributed the decline to softness in standalone Blue-ray players and a strong Q2 2015 in DTS’s TV segment.  The Home division accounted for 49% of total revenue in the quarter.
  • The Company’s Automotive division had revenue of $17.5 million in the second quarter, a substantial increase over the comparable year-earlier period (pre-acquisition of iBiquity). As a percentage of total sales, Automotive contributed 37% of overall revenue.
  • Revenues from DTS’s Mobile category were $6.4 million, an increase of 37% over Q2 2015. Mobile accounted for 14% of DTS’s overall revenue in the quarter.

Operating Expenses by Category:

  • Sales, General and Administrative (“SG&A”) expenses were $20.8 million in Q2 2016, an increase of 4.9% versus the year prior. SG&A represented 42.6% of sales during the quarter, which compares to 52.8% during Q2 2015.
  • Research and development (“R&D”) expenses were $12.6 million during the second quarter, an increase of over 30% compared to the second quarter of 2015. The increase is primarily due to an increase in headcount associated with iBiquity.  For the quarter, R&D expense was 25.8% of sales.  In the year-earlier period R&D represented 27.9% of sales.

Update on Market Adoption of Next-Generation Technologies:

As part of the Q2 Earnings release, management highlighted the market adoption of DTS-enabled content in both the cinema and the home.

The Company’s immersive audio technology, DTS:X, was incorporated in several feature films in the quarter such as Warcraft, Now You See Me 2 and The Secret Life of Pets.  In total, 31 feature films have been released with DTS:X audio technology.  DTS’s technology is now used in over 130 screens globally, which represents a more than 60% increase over the preceding quarter.

During the quarter DTS announced an agreement with Paramount Home Media Distribution to release a collection of full-length movies using DTS:X beginning with Daddy’s Home, The Big Short, Zoolander 2, and Whiskey Tango Foxtrot.

The below slide is taken from DTS’s investor presentation for the quarter.

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During DTS’s conference call with analysts, Chairman and CEO Jon Kircher responded to a question about competition in the theater market and offered context on the competitive environment.

“I think, the marketplace wants choice. DTS:X in the cinema as well as from an immersive audio format perspective is designed to offer a range of performance and flexibility advantages. So, today, we are in 130 screens and growing that doesn’t include all those that potentially or under contract. There is ongoing discussions with other parties around expanding that number. Year-over-year with the product essentially being slightly more than 15 months ago, we are actually tracking I think pretty well to into an accelerating future for DTS:X in cinemas. So, the bottom-line is that, not unlike our prior experience over the past 20 years in the professional space, or in the consumer space is that DTS is going to have an important role to play as it relates to the high quality consumption and enjoyment of immersive entertainment. And this is just part of a broader strategy to support our business downstream (source: SeekingAlpha transcript)” said Mr. Kircher.

 

Business Outlook:

Based on the strong quarterly results, management increased its guidance for the full year 2016.  DTS now anticipates full year revenue in the range of $185 million to $190 million, with growth driven by the mobile and automotive markets.  Operating margins for the full year are expected between 10% and 15%.

 

Related Content:

Press Release: DTS Q2 2016 Earnings Release

Presentation:  DTS Q2 2016 Investor Presentation

Transcript: DTS Q2 2016 Earnings Call (Seeking Alpha)

 

 

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Broadcast Vendor M&A: DTS Acquires Manzanita Systems

Broadcast Vendor M&A | Posted by Joe Zaller
Sep 22 2014

Audio technology specialist, DTS Inc. has acquired Manzanita Systems, a provider of MPEG software solutions for digital television, video on demand (VOD), and over-the-top (OTT) markets.  Terms of the deal were not disclosed.

Manzanita is best known in the video technology sector for its transport stream analyzers and software multiplexer solutions.  Manzanita’s technology is integrated into the solutions of several technology vendors, especially those involved in the transcoding and distribution of video content.

This is DTS’s first acquisition since its purchase of SRS Labs in July 2012. The addition of Manzanita’s video technology portfolio is an interesting move for DTS and may suggest a greater expansion into the video sector as a complement to DTS’s position in the audio sector.

“We are committed to growing our business in the network-connected media ecosystem and believe that the acquisition of Manzanita Systems will help DTS further strengthen its position in the space,” said Geir Skaaden, SVP Digital Content and Media Solutions at DTS.

Consistent with the seller rationale for many M&A transactions, Manzanita will now have access to significantly more resources as part of DTS.  According to Manzanita’s founder and CEO Greg Vines “joining DTS allows us to take advantage of its much larger platform and scale to further develop our product portfolio and offer customers even greater value.”

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Related Content:

Press Release: DTS Acquires Manzanita Systems

DTS Reports Strong Q2 2014 Results; Revenue Growth of 33% Year-over-Year

More Broadcast Vendor M&A: DTS to Acquire SRS Labs for $148 Million

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DTS Reports Strong Q2 2014 Results; Revenue Growth of 33% Year-over-Year

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 18 2014

Audio processing specialist DTS announced that its revenue for the first quarter of 2013 was $36.2m, an increase of 33% versus the same period a year ago, and flat versus the previous quarter.

On a GAAP basis net income for Q2 2014 was $7m, or $0.41 per, share compared to a net loss during the year earlier period of $2m or $(0.11) per share.  Net income for Q1 2014 was $5.6m or $0.32 per share.

GAAP gross margins were 93% during the quarter up slightly from the 91% gross margins recorded during Q2 2013 and flat compared to the Q1 2014.

Non-GAAP operating margins were 31% during the quarter.  This compares favorable versus the same period last year where non-GAAP operating margins were 13% and the preceding quarter when non-GAAP operating margins of 24% were recorded.

Jon Kirchner, DTS’s Chairman and CEO attributed the principal driver of top line growth in the quarter to “further penetration of the network connected segment as well as the resolution of several royalty audit matters.”

DTS’s network connected segment is the company’s largest.  It includes revenue generated from consumer electronic devices that are network-capable including TVs, smartphones, tablets, and PCs.  This segment contributed 50% of DTS’s revenue in the quarter compared to 45% during the year earlier period.  Melvin Flanigan, the Company’s CFO, highlighted the TV business within the network connect segment on the company’s earnings call as having grown 27% year-over-year.

DTS closed the quarter with cash and investments totaling $69.5m and generated $5.5m in operating cash flow.

In his prepared remarks on the call with analysts, Kirchner offered some interesting commentary on DTS’s relevance to 4K.  “DTS’ solution suite is particularly relevant as the market resets to support 4K or ultra high definition delivery which we believe will be disrupted with playback devices and will also require content services to rethink their high definition audio and video offerings. Already, DTS has partnered with companies to develop proof of concept 4K video distribution with DTS HD audio solutions specifically designed for OTT.”

 

Guidance Raised for Full Year 2014

DTS says it expects 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.

As a result of the strong performance in the quarter and management’s confidence in the remainder of the year, DTS raised its guidance for 2014.

The company says it is now expecting revenues in the range of $137m to $142m, non-GAAP operating margins in the mid-to-upper 20s, and non-GAAP EPS of $1.40 to $1.50.  Previous guidance was for revenue in the range of $132 million to $138 million, non-GAAP operating margins in the mid-20s, and EPS in the range of $1.20 to $1.40.

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Related Content:

Press Release: DTS Reports Strong Second Quarter 2014 Financial Results

Previous Year: DTS Posts Q2 2013 Loss, Lowers Full Year Outlook

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Broadcast Vendor M&A: Dolby to Acquire Doremi for $92.5 Million

broadcast technology market research | Posted by Joe Zaller
Feb 24 2014

Dolby Labs has signed a definitive agreement to acquire digital cinema replay server vendor Doremi for $92.5 million in cash plus an additional $20 million in contingent consideration that may be earned over a four-year period.

The addition of the Doremi product line complements Dolby’s existing line-up of digital cinema replay servers.  Dolby was a pioneer in this market, and enjoyed strong success in markets such as North America, where its system was adopted.  According to filings with US securities regulators, Dolby’s cinema product business (which includes more than just digital cinema replay servers) delivered $169.69m of revenue in 2010, but by the end of 2012 had declined 47% to $88.88m.

Doremi has established a strong foothold in emerging markets where the conversion of cinemas to digital projection technology has not been completed. According to company press releases, Doremi claims to have a 70% market share of digital cinema servers in Latin America, and to have shipped 55,000 of its digital cinema replay servers, including 5,000 units between June – December 2013.

Doremi says it was the first company to achieve compliance with the Digital Cinema Initiative (DCI) specification, and that its digital cinema replay products support 4K development and 3D High Frame Rate playback, which eh company says has “been a en a major contributor to the company’s success.”

Interestingly Dolby’s announcement specifically mentions the company’s new Atmos “object-based sound platform.”  Thus it’s likely that in addition to gaining share in developing markets, Dolby is using the Doremi acquisition as a way to expand the base of Atmos-enabled cinemas around the world.  If this strategy succeeds, Dolby can use the leverage of a large theatrical installed base to further enhance its core business of licensing technology for consumer applications.

Dolby has stated previously that Atmos technology, initially designed for the cinema can be brought to home users for TV and listening via headphones.

However, Dolby has competition for the next generation of consumer audio licensing opportunities. DTS and Fraunhofer have both developed “multi-dimensional audio” codecs with speakers enveloping the viewer (placed on the sides, in front, back and on top).

Rival DTS has developed its Ultra High-Definition (UHD) audio system (aka “Neo:X” consisting of 11.1 channels). German based research organization Fraunhofer (developer of the MP3 audio codec) has developed MPEG-H (up to 22.2 channels), which consists of an Extended HE-AAC based audio codec and a 3-D rendering engine, which supports the efficient transmission of “3-D audio signals” and flexible rendering for the playback of 3D audio in a wide variety of listening scenarios.

“Dolby and Doremi Labs have complementary technology expertise and solutions”

“Dolby and Doremi Labs have complementary technology expertise and solutions,” said Kevin Yeaman, President and CEO, Dolby Laboratories. “Together we’ll be able to advance the pace of innovation and create the kind of cinematic experiences that drive movie attendance for our exhibitor partners.”

“For more than 40 years, Dolby has provided innovative technology to the cinema exhibition industry, offering storytellers the tools and technology to express their visions in new ways,” said Camille Rizko, Founder and President, Doremi Labs. “But more importantly, Dolby shares our commitment to working closely with exhibitors to bring amazing experiences to moviegoers.”

According to Dolby, the acquisition is subject to customary closing conditions, including review by US and international regulators. Depending on these conditions, the transaction is anticipated to close by the end of 2014. The impact of the acquisition on fiscal year 2014 revenue and non-GAAP results is not expected to be material.

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Related Content:

Press Release: Dolby Signs Agreement to Acquire Doremi Labs

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DTS Posts Q2 2013 Loss, Lowers Full Year Outlook

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 19 2013

Audio processing specialist DTS announced that its revenue for the first quarter of 2013 was $27.2m, an increase of 25% versus the same period a year ago, and a decline of 17% versus the previous quarter.

The company said its network-connected business, which includes connected TVs, PCs and mobile devices, doubled versus last year.  However, the company saw revenue decline 19% versus last year in its Home AV business, and decline 10% in its Blu-Ray business.

Network connected revenue accounted for about 50% of total sales in the quarter. Blu-Ray and home AV represented just under 20% and just under 15% of total revenue respectively.

Broadcast revenue in the quarter was up slightly, while automotive remained relatively flat on a year-over-year basis. Broadcast and automotive represented less than 5% and 15%, respectively, of total revenue for the second quarter.

The GAAP net loss for the first quarter of 2013 was $2m, or $0.11 per share, compared to a GAAP net loss of $775,000, or $0.05 per share, in the second quarter of 2012, and a GAAP net loss of $1.5m, or $0.08 per share last quarter.

Non-GAAP net income in the quarter was $2.1m, or $0.11 per share, compared to non-GAAP net income of $3.5m, or $0.21 per share, last year, and non-GAAP net income of $4m, or $0.22 per share last quarter.

Operating expenses for the quarter were $26.6m, or 98% of total revenue.  This is an increase of 24% versus the previous year.

SG&A expenses for the quarter were $18,75m, up 12% versus the previous year. Research and development costs in the quarter were $7.8m, up 64% versus last year.

The non-GAAP operating margin in the second quarter of 2013 were 21%, down from 38% in the first quarter of 2012.

The non-GAAP operating margin in the second quarter of 2013 was 13%, down from 26% last year, and down from 21% last quarter.

The Company closed the quarter with cash and investments totaling $76.7m, flat with last quarter.

“DTS delivered attractive revenue growth in the second quarter in line with our expectations,” said DTS chairman and CEO Jon Kirchner. “The growth was driven by strong performance in our network-connected business. Our strategy remains squarely focused on the large network-connected opportunity, and as expected, this segment of our business contributed nearly half of total revenue during the quarter. As we enter the important autumn and holiday season, we are closely monitoring CE market headwinds and the timing of certain customer network-connected product rollouts. Importantly, we are very encouraged by the growing interest in our new Headphone:X and Play-Fi technologies and expect those products to see increasing design wins as we get into 2014. With growing content support and increasing device penetration, we are pleased with our strategic progress and remain focused on execution in the coming quarters.”

 

Business Outlook

The company lowered its forward guidance due to “uncertainties around the timing of certain mobile and Play-Fi product shipments, which are now expected to push into 2014; and a modestly weakening near-term CE business environment, which has impacted the Company’s expectations for home theater in a box systems, Blu-ray players and automotive unit volumes; and lower expected royalty recoveries.”

The Company now expects 2013 revenue in the range of $130 to $136 million, down from previously issued guidance of $140 to $146 million.

Management says it will offset any revenue weakness through active cost management, and therefore says its GAAP EPS expectations are unchanged.  On a GAAP basis, DTS continues to expect an operating margin of approximately 3% to 6% and expects EPS in the range of $(0.05) to $0.00 per diluted share.

Non-GAAP earnings for the year are now expected to be in the range of $0.98 to $1.12 per diluted share, down from previously issued guidance of non-GAAP EPS in the range of $1.05 to $1.20 per diluted share.

Stock-based compensation expense is now expected to be in the range of $0.38 to $0.41 per diluted share, down from previously issued guidance of $0.44 to $0.47 per diluted share.

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Related Content:

Press Release: DTS Reports Second Quarter 2013 Financial Results

Previous Quarter: DTS Q1 2013 Revenue Rises 22 Percent

Previous Year: DTS Posts Loss in Q2 2012 Due to Weak Consumer Demand for Blu-Ray

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DTS Q1 2013 Revenue Rises 22 Percent

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
May 09 2013

Audio processing specialist DTS announced that its revenue for the first quarter of 2013 was $32.7m, an increase of 22% versus the same period a year ago, and an increase of 10% versus the previous quarter.

The company said its network-connected business, which includes cone ted TVs, PCs and mobile devices, grew 246% year-over-year, but that sales to DVD and Blu-ray.

The GAAP net loss for the first quarter of 2013 was $1.5m, or $0.08 per share, compared to GAAP net income of $4m, or $0.24 per share, in the first quarter of 2012. Non-GAAP net income in the quarter was $4m, or $0.22 per share net of tax, compared to non-GAAP net income of $6.2m, or $0.37 per share net of tax, in the first quarter of 2012.

The GAAP operating margin in the first quarter of 2013 was 3%, compared to 26% in the first quarter of 2012. The non-GAAP operating margin in the first quarter of 2013 were 21%, down from 38% in the first quarter of 2012.

The results beat the expectations of equity analysts who were looking for revenue of $30.23m and non-GAAP net income of $0.14.

The Company closed the quarter with cash and investments totaling $76.6 million.

“DTS delivered strong revenue growth in the first quarter, consistent with our expectations, driven again by accelerating momentum in the network-connected markets,” said DTS chairman & CEO Jon Kirchner. “The strategic investments we have made in technology, products and content partnerships to expand our network-connected footprint are continuing to translate into meaningful design wins and customer momentum, particularly in mobile. The recent launches of our Headphone:X and DTS Layered Audio technologies continue to generate significant industry excitement. These launches, combined with new product and customer announcements during the quarter from a number of manufacturers, including Toshiba, Asustek, Samsung and Yulong, position us well to continue to drive our network-connected business in 2013 and beyond.”

 

Business Outlook

The Company continues to expect 2013 revenue in the range of $140 to $146 million, including a normal level of royalty recoveries, non-GAAP operating margin in the low- to mid-20s and non-GAAP EPS in the range of $1.05 to $1.20 per diluted share based on a normalized 40% effective tax rate. Stock-based compensation expense is expected to be in the range of $0.44 to $0.47 per diluted share net of tax and amortization of intangibles is expected to be in the range of $0.39 to $0.42 in 2013. On a GAAP basis, the Company expects an operating margin of approximately 3% to 6% and now expects EPS in the range of $(0.05) to $0.00 per diluted share.

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Related Content:

Press Release: DTS Reports First Quarter 2013 Financial Results

Previous Quarter: DTS Reports Fourth Quarter and Fiscal 2012 Financial Results

Previous Year: DTS Reports First Quarter 2012 Results

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Despite Rising Revenue, DTS Posts $19.1 Million Loss in Q3 2012 Due to Acquisition-Related Costs

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Nov 13 2012

Audio processing specialist DTS announced that its revenue for the third quarter of 2012 was $22.2m, an increase of 8% versus the same period a year ago, and an increase of 5% versus the previous quarter.

The company attributed its year-over year revenue increase to growth “network-connected markets”  — — such as connected TVs, mobile and automotive – which grew 41% versus last year.  Blu-ray revenue was essentially flat versus last year and up 17% versus last quarter. Revenue from DVD, stand-alone DMP and broadcast products declined versus last year.

The GAAP net loss for the quarter was $19.1m, or -$1.04 per, compared to net income of $2.9m, or $0.17 per share last year, and a GAAP net loss of $755,000, or -$0.05 per share, last quarter. The company attributed the loss in the quarter to acquisition and integration-related costs, stock-based compensation, and amortization of intangibles.

The non-GAAP net loss in the quarter was $11.1m, or -$0.61 per share, compared to non-GAAP net income of $4.5m, or $0.26 per share, last year, and non–GAAP net income of $3.5m last quarter.

The company attributed the non-GAAP net loss to the accounting treatment of the SRS acquisition, under which it recognized costs related to the acquisition without being able to recognize most of the associated revenue. This net loss was also the result of the tax impact of lower profitability on its global licensing entity located in Ireland.

The Company generated $6.7m in cash flow from operations during the third quarter of 2012, compared to $4m during the third quarter of 2011, and closed the quarter with cash and investments of $80.7m.

“Consistent with our strategy, DTS delivered attractive revenue growth in the network-connected markets despite what has been a challenging macroeconomic environment,” said Jon Kirchner, chairman and CEO of DTS, Inc. “We are pleased with our progress in the network-connected markets this quarter, which includes several recent smartphone and tablet product announcements. Looking ahead, with the SRS integration expected to be complete by year-end, DTS is well-positioned to capitalize on the significant market opportunities being created by an increasingly connected world. While our results through 2012 will continue to be impacted by significant acquisition-related noise, we believe the long-term prospects for our strategic markets are very much intact and we remain focused on accelerating growth in a difficult environment.”

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Related Content:

Press Release: DTS Reports Third Quarter 2012 Results

DTS Posts Loss in Q2 2012 Due to Weak Consumer Demand for Blu-Ray     

More Broadcast Vendor M&A: DTS to Acquire SRS Labs for $148 Million

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DTS Posts Loss in Q2 2012 Due to Weak Consumer Demand for Blu-Ray

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 06 2012

Audio processing specialist DTS announced that its revenue for the second quarter of 2012 was $21.8m, an increase of 6% versus the same period a year ago, and down 19% versus the previous quarter

The GAAP loss for the quarter was $755,000 or $0.05 per share, versus a profit of $2.6m, or $0.14 per share during the same period last year.  The company attributed the loss in the quarter to weaker consumer spending on Blu-Ray players, combined with higher expenses.

The results were below the expectations of equity analysts, who on average were expecting revenue of $21.7m and earnings of $0.18 per share.

Non–GAAP net income in the quarter was $3.5m, $4.2 million last year and $6.2m last quarter.

Gross profit for the first quarter of 2012 was $21.56m, or 99% of revenue, compared to $20.37m,, or 99% of revenue last year, and 26.7m, or 99% of revenue last quarter.

“Our growth in the second quarter was impacted by weakness in consumer electronics spending with regard to Blu-ray,” said Jon Kirchner, chairman and CEO of DTS, Inc. “However, our strategy is squarely focused on the network-connected markets, in which we posted year over year growth of 81%. These markets were the largest contributors to our revenues this quarter, and we expect them to represent the majority of our business going forward. As we complete the integration of SRS Labs, including combining product and technology roadmaps, DTS is in an even better position to continue to seize the market opportunities presented by cloud-based entertainment and the proliferation of connected devices.  We expect to realize annual synergies of at least $8 million beginning in 2013.”

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Related Content:

Press Release: DTS Reports Second Quarter 2012 Results  

Previous Quarter: DTS Reports First Quarter 2012 Results 

More Broadcast Vendor M&A: DTS to Acquire SRS Labs for $148 Million

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DTS Reports First Quarter 2012 Results

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
May 07 2012

Audio processing specialist DTS announced that its revenue for the first quarter of 2012 was $26.9m, flat with the same period a year ago.  The results were at the high end of the company’s previously issued guidance.

Included in these results are 13% year-over-year growth from the network-connected markets and $2.25m in royalty recoveries.

The company said that excluding royalty recoveries, it had an 8% year-to-year decline in revenue due to accelerating declines in DVD-based products, completion of a broadcast arrangement in 2011, softness in Blu-ray game consoles, and lingering effects of the Thailand floods on the supply chain.

Non-GAAP net income was $6.2m, compared to non-GAAP net income $7.1m in the first quarter of 2011.

The non-GAAP operating margin in the first quarter of 2012 was 38%, down from 44% in the first quarter of 2011.

Gross profit for the first quarter of 2012 was $26.7m, or 99% of revenue, compared to $26.6m, or 99% of revenue, for the first quarter of 2011.

 

Business Outlook

The company issued forward looking guidance, which did not include the recently announced $148m acquisition of SRS Labs.

DTS said it expect 2012 revenue in the range of $112m to $116m, with a non-GAAP operating margin of approximately 40% and non-GAAP EPS in the range of $1.60 to $1.65 per diluted share. On a GAAP basis, management expects operating margins of approximately 30% and EPS in the range of $1.18 to $1.22 cents per diluted share.

 

Related Content:

Press Release: DTS Reports First Quarter 2012 Results

More Broadcast Vendor M&A: DTS to Acquire SRS Labs for $148 Million

Previous Year: DTS Q1 2011 Revenue Jumps 23% Thanks to Increasing Adoption of Blu-Ray

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More Broadcast Vendor M&A: DTS to Acquire SRS Labs for $148 Million

Broadcast Vendor M&A | Posted by Joe Zaller
Apr 25 2012

Audio processing specialist DTS announced it will acquire all outstanding shares of SRS Labs in a cash-and-stock transaction valued at approximately $148m, including acquired net cash of approximately $38m.  Under the terms of the agreement, DTS will pay 50% cash 50% stock for SRS.

DTS said it expects the transaction to be accretive on a GAAP basis by 2013, supported by at least $8m in estimated annual combined cost synergies. Combined pro forma revenue for the two companies for the fiscal year ended December 31, 2011 was $129.8m.

SRS Labs chairman, CEO and president Thomas C.K. Yuen, is expected to join the DTS board of directors.

DTS says its technology and product range is highly complementary with SRS, and that the deal will expand its already sizeable portfolio of audio-related intellectual property, creating one of the broadest in the industry with over 1,000 registered and pending patents and trademarks.

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Related Content:

Press Release: DTS to Acquire SRS Labs in Cash-and-Stock Transaction

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