NOVATO, Calif. Feb. 8, 2011 /PRNewswire/ -- Sonic Solutions (Nasdaq: SNIC) today reported financial results for its third quarter of fiscal year 2011 ended Dec. 31.

Third Quarter Fiscal 2011 GAAP Results

For the third quarter of its 2011 fiscal year, Sonic had net revenue of $26.4 million, gross profit of $14.9 million representing a gross margin of 56%, and operating expense of $36.9 million.  Due primarily to the release of a valuation allowance, Sonic's tax benefit for the quarter was $25.8 million, resulting in net income of $4.2 million, or $0.09 per diluted share based on 48.5 million shares outstanding.

Third Quarter Fiscal 2011 Non-GAAP Results

Sonic's non-GAAP net revenue for the December quarter was $46.3 million, calculated by excluding the impact of $0.7 million in warrant-related contra revenue and by taking into account $19.1 million in multi-year DivX site license payments, minimum royalty payments, and unbilled per-unit royalties for units shipped prior to Sonic's acquisition of DivX ("black hole revenue").  Non-GAAP gross profit, which excludes $955 thousand in amortization of acquired intangibles, was $35.7 million.  Based on an assumed effective tax rate of 40%, Sonic's non-GAAP net income for the quarter was $1.6 million, or $0.03 per diluted share based on 48.5 million shares outstanding.

In addition to Sonic's results, DivX had revenue of $1.4 million during the period between October 1, 2010 and the close of its acquisition by Sonic on October 7, 2010.  Excluding the impact of this DivX revenue, Sonic's Adjusted EBITDA for the quarter totaled $2.9 million.

Given the acquisition of DivX during the third quarter of fiscal 2011 and the lack of consolidated or comparable results for prior periods, Sonic does not believe it would be meaningful or appropriate to present corresponding non-GAAP results for the nine months ended December 31, 2010 or for the corresponding three and nine month periods in fiscal 2010.

Sonic Solutions GAAP Condensed Consolidated Statements of Operations  (in thousands, except per share data) (unaudited)         3 mos. ended

 9 mos. ended

  December 31,  December 31,  2010 2009 2010 2009 Net revenue$26,427 $26,392 $77,175 $77,975 Cost of revenue11,517 8,044 28,119 24,005 Gross profit14,910 18,348 49,056 53,970          Operating expenses:        Marketing and sales12,668 8,489 27,673 22,245 Research and development13,928 5,784 26,195 19,024 General and administrative7,925 4,673 17,144 13,689 Restructuring charges- (58) - 508 Acquisition expenses2,400 - 4,966 - Total operating expenses36,921 18,888 75,978 55,466 Operating loss(22,011) (540) (26,922) (1,496) Other income (expense), net496 84 882 (266) Loss before income taxes(21,515) (456) (26,040) (1,762)          Provision for (benefit from ) income taxes(25,751) (112) (26,600) 619 Net income (loss)$4,236 $(344) $560 $(2,381)          Net income (loss) per share:        Basic$0.09 $(0.01) $0.02 $(0.09) Diluted$0.09 $(0.01) $0.02 $(0.09) Shares used in computing net income (loss) loss per share:        Basic47,792 27,317 36,439 26,871 Diluted48,493 27,317 37,252 26,871