DTS, INC.

CIK:0001226308|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Revenue	$ 48,749	$ 30,673	$ 142,599	$ 99,036
Cost of revenue	6,449	2,702	18,751	8,229
Gross profit	42,300	27,971	123,848	90,807
Operating expenses:
Selling, general and administrative	26,283	21,348	71,563	59,317
Research and development	13,489	9,320	38,788	28,559
Change in fair value of contingent consideration	0	(400)	0	(400)
Total operating expenses	39,772	30,268	110,351	87,476
Operating income (loss)	2,528	(2,297)	13,497	3,331
Interest and other expense, net	(1,234)	(173)	(3,633)	(792)
Income (loss) before income taxes	1,294	(2,470)	9,864	2,539
Provision for income taxes	724	332	4,072	2,000
Net income (loss)	$ 570	$ (2,802)	$ 5,792	$ 539
Net income (loss) per common share:
Basic (in dollars per share)	$ 0.03	$ (0.16)	$ 0.33	$ 0.03
Diluted (in dollars per share)	$ 0.03	$ (0.16)	$ 0.32	$ 0.03
Weighted average shares outstanding:
Basic (in shares)	17,701	17,255	17,560	17,431
Diluted (in shares)	18,637	17,255	18,126	18,167
Cash dividend declared per common share (in dollars per share)	$ 0.02	$ 0	$ 0.02	$ 0

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income (loss)	$ 5,792	$ 539
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,103	10,838
Stock-based compensation charges	9,581	8,678
Deferred income taxes	(3,317)	(5,310)
Excess tax benefits from stock-based awards	(486)	(914)
Change in fair value of contingent consideration	0	(400)
Amortization of debt issuance costs	460	0
Other	45	353
Changes in operating assets and liabilities, net of business combinations:
Accounts receivable	(13,015)	(669)
Prepaid expenses and other assets	(2,658)	881
Accounts payable, accrued expenses and other liabilities	(4,277)	(1,884)
Deferred revenue	(2,615)	(2,831)
Income taxes receivable/payable	4,790	4,758
Net cash provided by operating activities	14,403	14,039
Cash flows from investing activities:
Purchases of available-for-sale investments	(26,718)	(34,666)
Maturities of available-for-sale investments	11,125	8,800
Sales of available-for-sale investments	12,125	2,502
Cash paid for business combinations, net	(2,404)	0
Purchases of property and equipment	(2,530)	(2,525)
Purchases of intangible assets	(2,429)	(1,853)
Other investing activities	0	(300)
Net cash used in investing activities	(10,831)	(28,042)
Cash flows from financing activities:
Repayments of long-term borrowings	(31,406)	0
Payment of contingent consideration	(480)	0
Holdback and other payments related to business combinations	(1,170)	0
Proceeds from the issuance of common stock under stock-based compensation plans	6,138	7,962
Cash paid for shares withheld for taxes	(2,308)	(2,864)
Dividend payments	(354)	0
Excess tax benefits from stock-based awards	486	914
Purchases of treasury stock	0	(19,147)
Net cash used in financing activities	(29,094)	(13,135)
Net change in cash and cash equivalents	(25,522)	(27,138)
Cash and cash equivalents, beginning of period	52,208	99,435
Cash and cash equivalents, end of period	26,686	72,297
Significant non-cash transactions:
Holdbacks for business combinations	$ 1,658	$ 0

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 26,686	$ 52,208
Short-term investments	13,083	9,657
Accounts receivable, net of allowance for doubtful accounts of $245 and $541 at September 30, 2016 and December 31, 2015, respectively	26,911	12,454
Prepaid expenses and other current assets	7,832	5,855
Income taxes receivable	2,276	4,130
Total current assets	76,788	84,304
Property and equipment, net	28,076	29,022
Intangible assets, net	144,907	157,936
Goodwill	90,692	108,726
Deferred income taxes	41,866	24,018
Other long-term assets	9,348	3,934
Total assets	391,677	407,940
Current liabilities:
Accounts payable	6,792	5,979
Accrued expenses	17,963	22,960
Deferred revenue	3,096	5,711
Income taxes payable	80	123
Current portion of long-term debt, net	26,486	21,486
Total current liabilities	54,417	56,259
Long-term debt, net	100,552	136,666
Other long-term liabilities	12,419	9,983
Commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock—$0.0001 par value, 5,000 shares authorized at September 30, 2016 and December 31, 2015; no shares issued and outstanding	0	0
Common stock—$0.0001 par value, 70,000 shares authorized at September 30, 2016 and December 31, 2015; 22,501 and 21,988 shares issued at September 30, 2016 and December 31, 2015, respectively; 17,834 and 17,321 shares outstanding at September 30, 2016 and December 31, 2015, respectively	3	3
Additional paid-in capital	272,479	258,660
Treasury stock, at cost—4,667 at September 30, 2016 and December 31, 2015	(111,331)	(111,331)
Accumulated other comprehensive income	778	778
Retained earnings	62,360	56,922
Total stockholders' equity	224,289	205,032
Total liabilities and stockholders' equity	$ 391,677	$ 407,940