DTS Reports Preliminary Second Quarter 2013 Financial Results

DTS Reports Preliminary Second Quarter 2013 Financial Results

   Network-Connected Business Up 100%, Driving Solid Year-Over-Year Growth

  Company Delays Conference Call and Form 10-Q Filing to Finalize Accounting
                     Related to a Royalty Recovery Matter

CALABASAS, Calif., Aug. 7, 2013 (GLOBE NEWSWIRE) -- DTS, Inc. (Nasdaq:DTSI)
today announced preliminary financial results for the second quarter ended
June 30, 2013. The Company also announced the delay of its earnings conference
call and the expected filing of its Form 10-Q to finalize the accounting
related to a royalty recovery matter not reflected in the preliminary results
below. The ultimate resolution of the matter may result in additional revenue
or a balance sheet-related purchase accounting adjustment pertaining to the
SRS acquisition.

"DTS delivered attractive revenue growth in the second quarter, driven by
strong performance in our network-connected business, and we are pleased with
our results to date," said Jon Kirchner, chairman and CEO of DTS, Inc. "Due to
the complexity and ambiguity of certain rules surrounding accounting for
business combinations, we are still working to finalize the accounting for
this royalty recovery matter. We believe it is important to determine the
proper accounting and are working aggressively to resolve the matter. We will
hold our conference call as soon as the matter is finalized."

Preliminary Quarterly Financial Comparison
                                       Q2 2013        Q2 2012
Revenue                                 $27.2 million  $21.8 million
Year-over-year growth rate              25%            6%

GAAP Net income/(loss)                  $(2.0) million $(755,000)
GAAP Earnings/(loss) per share*         $(0.11)        $(0.05)

Non-GAAP Operating margin               13%            26%
Non-GAAP Net income                     $2.1 million   $3.5 million
Non-GAAP Earnings per share*            $0.11          $0.21
*Earnings/(loss) per diluted share net of tax

Other Preliminary GAAP Results
                                       Q2 2013        Amount per diluted
Stock-based compensation                $2.9 million   $0.10
Amortization of intangibles             $2.5 million   $0.08
Acquisition and integration-related     $47,000        $0.00
*Amount per diluted share net of tax

The GAAP and non-GAAP reconciling items for the second quarters of 2013 and
2012 can be found in the "Non-GAAP Financial Metrics" schedule attached to
this press release and on the investor relations portion of the Company's
website at www.DTS.com.

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 stock-based compensation, the
amortization of intangible assets, and certain acquisition and
integration-related charges.In addition, the Company's GAAP tax rate is
currently subject to substantial volatility caused by three-year cumulative
pre-tax losses in the US, which now require the Company to record a valuation
allowance against all US Federal deferred tax benefits.Management believes
that the Company's inability to utilize its US deferred tax benefits is
temporary, and as a result, the appropriate measure for its effective tax
rate, until such time as the valuation allowance issue is resolved, is to
impute a normalized 40% effective tax rate on the pretax 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 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' 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

About DTS, Inc.

DTS, Inc. (Nasdaq:DTSI) is a premier audio solutions provider for
high-definition entertainment experiences—anytime, anywhere, on any device.
DTS' audio solutions enable delivery and playback of clear, compelling
high-definition audio, which is incorporated by hundreds of licensee customers
around the world, into an array of consumer electronic devices. From a
renowned legacy as a pioneer in high definition 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 compelling movies,
music, games and other forms of digital entertainment to a growing array of
network-connected consumer devices. DTS technology is in car audio systems,
digital media players, DVD players, game consoles, home theaters, PCs, set-top
boxes, smart phones, surround music content 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 Los Gatos and Santa Ana,
California, Washington, China, France, Hong Kong, Japan, Singapore, South
Korea, Taiwan and the United Kingdom. Copyright 2013, DTS, Inc. DTS, the
Symbol, and DTS and the Symbol together are registered trademarks of DTS,
Inc.All other trademarks are the properties of their respective owners.All
rights reserved.

Forward-Looking Statements

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," "intends,"
"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; any statements regarding the Company's future use of
deferred tax benefits; any statements regarding anticipated growth in the
network-connected markets and in the Blu-ray, automotive and home AV markets;
any statements regarding resolution of the accounting related to the royalty
recovery matter; 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 continued decline in optical disc-based product sales, our
ability to penetrate the on-line and mobile content delivery market and adapt
our technologies for that market, 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, negative trends in the general
economy, continued weakness in the global financial markets and decreases in
consumer confidence, a loss of one or more of our key customers or licensees,
changes in domestic and international market and political conditions,
unanticipated changes in our tax provisions and other risks and uncertainties
more fully described in DTS' public filings with the Securities and Exchange
Commission, including DTS' most recent forms 10-K and 10-Q, available at
www.sec.gov. Readers are urged not to place undue reliance on these forward
looking statements, which speak only as of the date of this press release. DTS
does not intend to update any forward-looking statement contained in this
press release to reflect events or circumstances arising after the date


Non-GAAP Financial Metrics
(Amounts in thousands, except per share amounts)

The following tables show the Company's GAAP financial metrics reconciled to
non-GAAP financial metrics included in this release.

                                        For the Three Months Ended
                                        June 30,
                                        2013                 2012
Operating income (loss):                                     
GAAP operating income (loss)             $(1,815)           $74
Amortization of intangible assets        2,499               274
Stock-based compensation                 2,912               2,918
Acquisition and integration related      47                  2,324
Non-GAAP operating income                $3,643             $5,590
Non-GAAP operating income as a % of      13%                  26%
Net income (loss):                                           
GAAP net loss                            $(2,027)           $(755)
Amortization of intangible assets        2,499               274
Stock-based compensation                 2,912               2,918
Acquisition and integration related      47                  2,324
Tax adjustment                           (1,350)             (1,277)
Non-GAAP net income                      $2,081             $3,484
Non-GAAP diluted income per common share $0.11              $0.21
Weighted average diluted shares          18,478              16,943
* On July 20, 2012, DTS completed its acquisition of SRS Labs, Inc. in a
cash-and-stock transaction.
On July 5, 2012, DTS completed its acquisition of assets from Phorus, Inc. and
Phorus, LLC.

CONTACT: Media & Investor Contacts
         Sard Verbinnen & Co
         John Christiansen/Jenny Gore
         (415) 618-8750

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