Agoura Hills, Calif. — May 12, 2008 — DTS, Inc. (Nasdaq: DTSI) today announced financial results for the first quarter ended March 31, 2008. In addition, the Company announced that it has sold its Digital Cinema business to Beaufort California, Inc., a member of Beaufort International Group Plc. in England.
In the first quarter of 2008, DTS reported revenue from continuing operations of $15.2 million, an increase of 21% over the first quarter of 2007. Income from continuing operations net of tax was $3.3 million, or $0.18 per diluted share, compared to income from continuing operations net of tax of $2.0 million, or $0.11 per diluted share, reported in the first quarter of 2007. There were no royalty recovery payments in the first quarter of 2008, compared to approximately $0.9 million in the first quarter of 2007.
Stock-based compensation expense for the first quarter of 2008 was $1.1 million, or $0.04 per diluted share net of tax, compared to $0.7 million or $0.02 per diluted share net of tax, for the first quarter of 2007.
The sale of the Digital Cinema business closed on May 9 for approximately $3.3 million in cash and the assumption of certain liabilities. Under the terms of this transaction, in certain circumstances DTS could receive up to $11.7 million in additional consideration over the next few years. In addition, as previously reported, the Company sold its Digital Images business on April 4 for $7.5 million in cash.
“We have now completed the sale of both the Digital Images and Digital Cinema businesses which allows us to focus entirely on building a high growth and highly profitable consumer business. We truly appreciate the dedication of the management teams and employees who continued to build these businesses throughout the sales process,” commented Jon Kirchner, president and CEO of DTS, Inc.
“We had a solid first quarter which slightly exceeded our expectations. The year-over-year increase in revenue was attributable to growth in the HD optical media markets, primarily related to game consoles and stand-alone players. Revenue related to high definition products accounted for approximately 21% in the first quarter of 2008, up from 5% in the same period last year. “In summary, with the sale of the businesses behind us, a solid first quarter and increasing momentum in Blu-ray Disc, we are pleased with our strong start in 2008. However, as we enter our seasonally soft second quarter we believe that it is prudent to remain cautious about our outlook in the near term, particularly in light of the weakness in the broader economy.“We believe we are well on track to achieve our full year expectations of $55 to $59 million dollars in revenue and EPS from continuing operations of $0.52 to $0.58 per diluted share,” concluded Kirchner.