Slide 1: DTS, Inc. Acquisition of iBiquity Digital Corporation
DTS, INC. ACQUISITION OF iBIQUITY DIGITAL CORPORATION SEPTEMBER 2, 2015 Information on this slide is confidential property of DTS. Any unauthorized copying is strictly prohibited. © 2015 DTS, Inc. 1
Slide 2: Safe Harbor
SAFE HARBOR During this presentation, management may make forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Words such as “expects,” “anticipates,” “intends,” “plans,”
Slide 3: DTS Acquisition of iBiquity: Expanding Premium Sound & Experiences
DTS ACQUISITION OF iBIQUITY Expanding Premium Sound & Experiences Across Entertainment Ecosystem Content Technology/Brand Products 3 Information on this slide is confidential property of DTS. Any unauthorized copying is strictly prohibited. © 2015 DTS, Inc.
Slide 4: iBiquity Value Proposition
iBIQUITY VALUE PROPOSITION Standards Sole provider and only FCC-approved digital AM/FM technology Broadcast Content >2,300 radio stations = +90% of U.S. population Auto Footprint ~35% penetration in U.S. Auto Market IP Portfolio >100 U.S. patents – defensible IP patent portfolio Brand 72% “Definitel
Slide 5: Broadcast Content
BROADCAST CONTENT Content Drives Demand Digital Upgrade of AM/FM Radio HD Radio Success Radio is used by more than 90% of Americans Radio broadcast is shifting to digital 92,300+ U.S. radio stations serving 90%+ of the population have upgraded to HD Radio technology 91,600+ new HD2, HD3 and HD4 digi
Slide 6: U.S. Auto Footprint
U.S. AUTO FOOTPRINT Major OEMs and Long-Term Contracts with Automotive Suppliers Automotive Manufacturers Tier 1 Suppliers Information on this slide is confidential property of DTS. Any unauthorized copying is strictly prohibited. © 2015 DTS, Inc. 6
Slide 7: HD Radio Brand
HD RADIO BRAND Consumer AWARENESS Feedback is Positive SATISFACTION (n = 500) Completely Satisfied 55% 29% Very Satisfied 36% 71% Somewhat Satisfied 7% Somewhat Dissatisfied 1% Awareness Not Aware Very Dissatisifed 1% ADVOCACY DEMAND (n = 1,022) Definitely would (n = 1,022) Definitely would 72% 66%
Slide 8: Why iBiquity? Compelling Strategic and Financial Fit
WHY iBIQUITY? Compelling Strategic and Financial Fit Shared Vision: SOUND AND EXPERIENCE Expanding Auto and Broadcast Footprint MATTERS Scalable, Attractive Licensing Model Growth Opportunities: International, Mobile, Home… Cash Flow Time Information on this slide is confidential property of DTS. An
Slide 9: Opportunity for Enhanced Long-Term Growth
OPPORTUNITY FOR ENHANCED LONG-TERM GROWTH Strategic Synergies to Leverage Platform for Market Expansion Information on this slide is confidential property of DTS. Any unauthorized copying is strictly prohibited. © 2015 DTS, Inc. 9 LISTEN
Slide 10: Transaction Summary
TRANSACTION SUMMARY Value ƒ ƒ ~$172M in equity value Cash-free, debt-free basis Consideration ƒ ~$135M of new debt and ~$37M cash Synergies ƒ Expect strategic and financial synergies Accretion ƒ Expected to be accretive in 2016 Closing Conditions ƒ Customary closing conditions Anticipated Closing ƒ
Slide 11: 2015 Non-GAAP Combined DTS and iBiquity Revised Outlook
2015 NON-GAAP COMBINED DTS AND iBIQUITY Revised Outlook for 2015 Revised Outlook 2015 Revenue $140M - $145M Operating Income $34M - $38M Operating Margin 24% - 26% EPS* $1.27 - $1.35 *Assumes $1.3M of interest expense Estimated $8M in additional expenses from iBiquity in Q4’15 Minimal revenue in Q4’
Slide 12: 2015 iBiquity GAAP Financial Highlights
2015 iBIQUITY GAAP FINANCIAL HIGHLIGHTS Positive Revenue and Operating Income Contributions Estimated iBiquity Pro Forma 2015 Revenue $40M – $50M Operating Income* $12M – $18M Operating Margin* 30% – 36% *Excludes integration related costs Estimated $5M of annual interest expense from debt financing
Slide 13: Information on this slide is LIS T EN
Information on this slide is confidential property of DTS. Any unauthorized copying is strictly prohibited.© 2015 DTS, Inc. 13 LIS T EN