DTS Reports Q4 loss; Selling Cinema and Images Business

Restructuring costs and stock based compensation expenses contributed to DTS Inc. reporting a $5 million net loss for the fourth quarter, the company announced Tuesday. The board of directors of the Agoura Hills-based digital technology company also announced it would sell its cinema and digital images business to better concentrate on its electronic components business. The sale is expected to be finalized by the end of 2007. The new company, DTS Digital Cinema, will be located in Burbank. “As we enter 2007, we are at the beginning of what we believe will be a major transition to high-definition delivery, which we expect will result in significant revenue and profit growth over the next five years,” said firm President and CEO Jon Kirchner, in a statement released Tuesday. For the fourth quarter ending Dec. 31, DTS reported net loss of $5 million, or a loss of $0.28 per diluted share, on revenues of $12.7 million. That is a drop from the net profit of $1.4 million, or $0.07 per diluted share, on revenues of $13 million for the fourth quarter of 2005. The quarter included $1 million in stock based compensation expenses; and $3.8 million in restructuring costs. For the full year, the company reported a net income of $3 million, or $0.16 per diluted share, on revenues of $59 million. That is a 61 percent drop from the $7.9 million, or $0.43 per diluted share, on revenues of $57 million for the 2005 fiscal year. The full year results were affects by $3.6 million in stock based compensation expenses; $3 million in restructuring costs to buy out a commission agreement for licensing intellectual property in the China market; and $1.1 million in non-deductible costs related to the separation of the DTS Digital Cinema business.