8-K 1 a08-10413_18k.htm 8-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 4, 2008

 

DTS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

000-50335

 

77-0467655

(State or other jurisdiction
of incorporation)

 

(Commission
File Number)

 

(I.R.S. Employer
Identification No.)

 

5171 Clareton Drive

Agoura Hills, CA

 

91301

(Address of principal executive offices)

 

(Zip Code)

 

(818) 706-3525

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 


 

Item 1.01               Entry into a Material Definitive Agreement

 

On April 4, 2008, DTS, Inc. (the “Company”), DTS Digital Images, Inc. (“DI”), and Reliance Big Entertainment Private Limited (“Reliance”), entered into a Stock Purchase Agreement (the “Agreement”) providing for the sale of DI by the Company to Reliance.  The sale was consummated the same day.  Pursuant to the terms of the Agreement, the Company received cash consideration of approximately $7.5 million.  The Agreement contains customary representations, warranties and covenants.

 

DI is engaged in the business of digital restoration and enhancement of moving pictures.  There is no material relationship, other than in respect of the Agreement, between the Company and its affiliates, or any director or officer of the Company, or any associate of any such director or officer on the one hand, and Reliance on the other hand.

 

This summary description of the Agreement and the transaction is not complete and is qualified in its entirety by the complete text of the Agreement, a copy of which is being filed as Exhibit 10.75 to this Report on Form 8-K and is incorporated herein by reference.

 

Item 2.01               Completion of Acquisition or Disposition of Assets

 

The information set forth above in response to Item 1.01 is incorporated in its entirety herein.

 

Item 8.01               Other Events

 

On April 8, 2008, the Company filed a press release announcing  its entry into the Agreement and the consummation of the transaction.  A copy of this press release is filed as Exhibit 99.1 to this Report on Form 8-K and is incorporated herein by reference.

 

Item 9.01               Financial Statements and Exhibits

 

(b)           Pro Forma Financial Information

 

The following unaudited pro forma condensed consolidated balance sheet is based upon and should be read in conjunction with the historical consolidated financial statements and related notes thereto of the Company.

 

The results of operations of DI had been classified as a discontinued operation for all periods presented in the audited historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2007, in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). Accordingly, there are no pro forma adjustments to continuing operations necessary to reflect the Company’s sale of DI, and as such, the Company has not included a pro forma statement of operations in this Item 9.01(b).

 

The unaudited pro forma condensed consolidated balance sheet of the Company as of December 31, 2007 gives effect to the closing of the transaction contemplated by the Agreement. In accordance with SFAS 144, the assets and liabilities of DI were classified as held for sale on the Company’s consolidated balance sheet from March 31, 2007 in the Company’s Quarterly Report on Form 10-Q through December 31, 2007 in the Company’s Annual Report on Form 10-K.

 

The unaudited pro forma condensed consolidated balance sheet as of December 31, 2007 has been prepared as if the sale of DI had been consummated on December 31, 2007 and is based upon currently available information, estimates and assumptions that are deemed appropriate by the Company’s management. The unaudited pro forma condensed consolidated balance sheet may be subject to adjustments based on the actual carrying value of net assets sold at the date of closing, among other considerations, and is not necessarily indicative of the results that would have been reported had such transaction actually occurred on the date specified, nor is it necessarily indicative of our future financial condition.

 

The unaudited pro forma condensed consolidated balance sheet is prepared in accordance with Article 11 of Regulation S-X, and is based on and should be read in conjunction with, and is qualified in its entirety by, the historical consolidated financial statements and notes thereto of the Company.

 

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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

AS OF DECEMBER 31, 2007

(UNAUDITED - AMOUNTS IN THOUSANDS)

 

DTS, Inc.

Pro Forma Consolidated Balance Sheet

 

 

 

As

 

Disposition

 

 

 

 

 

Reported

 

Adjustments

 

Pro Forma

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

35,523

 

$

7,500

  (A)

$

43,023

 

Short-term investments

 

49,879

 

 

 

49,879

 

Accounts receivable, net

 

8,675

 

 

 

8,675

 

Deferred income taxes

 

8,776

 

(2,252

) (B)(C)

6,524

 

Prepaid expenses and other current assets

 

1,342

 

 

 

1,342

 

Income taxes receivable, net

 

2,085

 

(864

) (D)

1,221

 

Assets of discontinued operations held for sale

 

8,629

 

(1,249

) (C)

7,380

 

Total current assets

 

114,909

 

3,135

 

118,044

 

Property and equipment, net

 

5,861

 

 

 

5,861

 

Intangible assets, net

 

2,387

 

 

 

2,387

 

Deferred income taxes

 

8,584

 

(937

) (B)(C)

7,647

 

Other assets

 

3,019

 

 

 

3,019

 

Assets of discontinued operations held for sale

 

3,457

 

(1,223

) (C)

2,234

 

Total assets

 

$

138,217

 

$

975

 

$

139,192

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

1,068

 

 

 

$

1,068

 

Accrued expenses and other current liabilities

 

6,118

 

 

 

6,118

 

Liabilities of discontinued operations held for sale

 

7,503

 

(417

) (C)

7,086

 

Total current liabilities

 

14,689

 

(417

)

14,272

 

Other long-term liabilities

 

2,242

 

 

 

2,242

 

Liabilities of discontinued operations held for sale

 

474

 

 

 

474

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock and additional paid-in capital

 

140,010

 

 

 

140,010

 

Treasury stock, at cost

 

(22,670

)

 

 

(22,670

)

Accumulated other comprehensive income

 

193

 

 

 

193

 

Retained earnings

 

3,279

 

1,392

(E)

4,671

 

Total stockholders' equity

 

120,812

 

1,392

 

122,204

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

138,217

 

$

975

 

$

139,192

 

 

The accompanying notes are an integral part of this unaudited pro forma condensed consolidated balance sheet.

 

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NOTE 1 – BASIS OF PRESENTATION

 

Historical financial information of the Company as of December 31, 2007 has been derived from audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

 

NOTE 2 – PRO FORMA BALANCE SHEET ADJUSTMENTS

 

(A) To reflect the total cash proceeds received from the sale of DI of $7.5 million.

 

(B) At December 31, 2007, the form of transaction for the sale of DI was uncertain and therefore these deferred tax assets were accounted for in continuing operations, as they would have been retained by the Company had the DI transaction been structured as an asset sale.

 

(C) To reflect the elimination of the assets sold and liabilities disposed of pursuant to the Agreement based on the balances recorded as of December 31, 2007.

 

(D) To reflect the income taxes payable related to the estimated change to the adjustment of carrying value of assets held for sale.

 

(E) To reflect the estimated change to the adjustment of carrying value of assets held for sale, net of tax.

 

(d)           Exhibits

 

10.75       Stock Purchase Agreement, dated April 4, 2008, among DTS, Inc., DTS Digital Images, Inc., and Reliance Big Entertainment Private Limited

 

99.1         Press release dated April 8, 2008 of DTS, Inc.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

DTS, INC.

 

 

 

 

 

 

Date: April 10, 2008

 

 

/s/ Melvin Flanigan

 

Melvin Flanigan

 

Executive Vice President,

 

Finance and Chief

 

Financial Officer

 

(principal financial and

 

accounting officer)

 

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Exhibit Index

 

Exhibit No.

 

Description

10.75

 

Stock Purchase Agreement, dated April 4, 2008, among DTS, Inc., DTS Digital Images, Inc., and Reliance Big Entertainment Private Limited

99.1

 

Press release dated April 8, 2008 of the Company                                   .

 

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