Exhibit 99.1
Dolby Laboratories Reports First Quarter Fiscal 2008 Results
First Quarter Revenue Grows 44 Percent Year-Over-Year
SAN FRANCISCO--(BUSINESS WIRE)--Dolby Laboratories, Inc. (NYSE:DLB) today announced the Company's financial results for its first quarter of fiscal 2008.
For the first quarter, Dolby reported total revenue of $150.2 million, compared to $104.4 million for the first quarter of fiscal 2007, an increase of 44 percent. First quarter net income was $47.7 million, or $0.42 per diluted share, compared to $29.9 million, or $0.27 per diluted share, for the first quarter of fiscal 2007.
Net income for the first quarter of fiscal 2008 reflected stock-based compensation expense of $5.5 million compared to $4.9 million for the first quarter of fiscal 2007. Net income for the first quarter of fiscal 2008 includes charges related to the amortization of intangibles of $2.3 million compared to $0.5 million for the first quarter of fiscal 2007.
"Our first quarter results demonstrate Dolby’s strength across a broad range of entertainment platforms including DVD, PC, broadcast, cinema, and gaming,” said Bill Jasper, President and Chief Executive Officer, Dolby Laboratories. "We remain focused on innovation and being an essential element in the best entertainment technologies used by professionals and consumers."
Guidance
Dolby now expects fiscal 2008 revenue to be $575 million to $615 million. Net income is now expected to be $157 million to $167 million. Earnings per diluted share are now expected to be $1.34 to $1.44. While under FAS 123R, stock-based compensation expense may vary based on factors such as stock price or volatility, Dolby now expects stock-based compensation expense for the full year to be $19 million to $21 million. In addition, Dolby expects charges related to the amortization of intangibles for fiscal 2008 to be approximately $12 million, compared to $3.3 million in fiscal 2007.
The Company's Conference Call Information
Members of Dolby management will lead a conference call open to all interested parties to discuss Dolby Laboratories’ Q1 fiscal 2008 financial results at 2:00 p.m. PT/5:00 p.m. ET, Thursday, January 31, 2008.
Access to the teleconference will be available over the Internet from http://investor.dolby.com/medialist.cfm or by dialing 800-762-8779. International callers can access the conference call at 480-629-9041.
A replay of the call will be available beginning at 5:00 p.m. PT on January 31 until 9:00 p.m. on February 7, 2008; dial 800-406-7325 (international callers can access the replay by dialing 303-590-3030) and enter confirmation code 3832223. An archived version of the teleconference will also be available on Dolby Laboratories' website, www.dolby.com.
Forward-Looking Statements
Certain statements in this press release, including statements relating to Dolby's expectations regarding revenue, including net income, earnings per diluted share, stock-based compensation expense and charges relating to the amortization of intangibles for the fiscal year ending September 26, 2008, Dolby’s strength across a broad range of entertainment platforms, Dolby’s focus on innovation and having its technologies included as an essential element in entertainment technologies used by professionals and consumers, including long-term growth opportunities that may be derived therefrom, are “forward-looking statements” that are subject to risks and uncertainties. These forward-looking statements are based on management’s current expectations, and as a result of certain risks and uncertainties actual results may differ materially from those projected. The following important factors, without limitation, could cause actual results to differ materially from those in the forward-looking statements: risks associated with trends in the markets in which Dolby operates, including the DVD and next-generation DVD, broadcast, personal computer, gaming, mobile, or portable device markets, and trends relating to the development of additional and newer markets for Dolby technologies; the timing of a potential US or foreign economic recession; pricing pressures; the timing of Dolby's receipt of royalty reports and/or payments from its licensees; Dolby’s accuracy of calculation of royalties due to its licensors; Dolby’s ability to develop, maintain, and strengthen relationships with industry participants; Dolby’s ability to develop and deliver innovative technologies in response to new and growing markets in the entertainment industry; competitive risks; risks associated with conducting business in China and other countries that have historically limited recognition and enforcement of intellectual property and contractual rights; risks associated with the health of the motion picture industry generally; the development and growth of the market for digital cinema and digital 3D and Dolby’s ability to successfully penetrate this market; Dolby’s ability to expand its business generally, and to expand its business beyond sound technologies to other technologies related to digital entertainment delivery, by acquiring and successfully integrating businesses or technologies; and other risks detailed in Dolby’s Securities and Exchange Commission filings and reports, including the risks identified under the section captioned “Risk Factors” in its most recent Periodic Report on Form 10-Q or 10-K. Dolby disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.
About Dolby Laboratories
Dolby Laboratories (NYSE:DLB) develops and delivers products and technologies that make the entertainment experience more realistic and immersive. For more than four decades, Dolby has been at the forefront of defining high-quality audio and surround sound in cinema, broadcast, home audio systems, cars, DVDs, headphones, games, televisions, and personal computers. For more information about Dolby Laboratories or Dolby® technologies, please visit www.dolby.com.
Dolby and the double-D symbol are registered trademarks of Dolby Laboratories. S08/19197 DLB-F
DOLBY LABORATORIES, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| | | | |
| | | | |
| | Fiscal Quarter Ended |
| | December 29,
2006 | | December 28,
2007 |
| | (unaudited) |
| | (in thousands, except per share amounts) |
| Revenue: | | | | |
Licensing | | $ | 82,375 | | | $ | 122,430 | |
| Product sales | | | 15,210 | | | | 20,010 | |
| Services | | | 6,857 | | | | 7,787 | |
| Total revenue | | | 104,442 | | | | 150,227 | |
| | | | |
| Cost of revenue: | | | | |
| Cost of licensing | | | 7,660 | | | | 3,263 | |
Cost of product sales (1) | | | 8,686 | | | | 11,648 | |
Cost of services (1) | | | 2,683 | | | | 3,055 | |
| Total cost of revenue | | | 19,029 | | | | 17,966 | |
| Gross margin | | | 85,413 | | | | 132,261 | |
| Operating expenses: | | | | |
Selling, general and administrative (1) | | | 37,311 | | | | 50,986 | |
Research and development (1) | | | 8,836 | | | | 13,907 | |
| Total operating expenses | | | 46,147 | | | | 64,893 | |
| Operating income | | | 39,266 | | | | 67,368 | |
| Other income, net | | | 5,427 | | | | 5,204 | |
| Income before provision for income taxes and controlling interest | | | 44,693 | | | | 72,572 | |
| Provision for income taxes | | | 14,452 | | | | 24,607 | |
| Income before controlling interest | | | 30,241 | | | | 47,965 | |
| Controlling interest in net income | | | (348 | ) | | | (292 | ) |
Net income | | $ | 29,893 | | | $ | 47,673 | |
| | | | |
| | | | |
| Earnings per share (basic) | | $ | 0.28 | | | $ | 0.43 | |
| Earnings per share (diluted) | | $ | 0.27 | | | $ | 0.42 | |
| | | | |
| Weighted-average shares outstanding (basic) | | | 107,947 | | | | 110,592 | |
| Weighted-average shares outstanding (diluted) | | | 112,767 | | | | 114,700 | |
| | | | |
| | | | |
(1) Stock-based compensation included above was classified as follows: |
| | | | | | | | |
| Cost of product sales | | $ | 218 | | | $ | 241 | |
| Cost of services | | | 37 | | | | 40 | |
| Selling, general and administrative | | | 3,859 | | | | 4,295 | |
| Research and development | | | 747 | | | | 890 | |
DOLBY LABORATORIES, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| | | | |
| | September 28,
2007 | | December 28,
2007 |
| | (unaudited) |
| | (in thousands) |
| ASSETS | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 368,467 | | $ | 280,246 |
| Short-term investments | | | 231,217 | | | 200,727 |
| Accounts receivable, net | | | 28,165 | | | 37,955 |
| Inventories | | | 14,883 | | | 14,585 |
| Deferred income taxes | | | 73,686 | | | 76,086 |
| Prepaid expenses and other current assets | | | 17,000 | | | 19,585 |
| Total current assets | | | 733,418 | | | 629,184 |
| Property, plant and equipment, net | | | 85,552 | | | 85,079 |
| Intangible assets, net | | | 35,389 | | | 93,672 |
| Goodwill | | | 39,364 | | | 258,967 |
| Long-term investments | | | 73,224 | | | 29,301 |
| Long-term deferred income taxes | | | 12,393 | | | 17,887 |
| Other assets | | | 12,357 | | | 12,541 |
| Total assets | | $ | 991,697 | | $ | 1,126,631 |
| | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
| Current liabilities: | | | | |
| Accounts payable and accrued liabilities | | $ | 119,068 | | $ | 138,488 |
| Income taxes payable | | | 9,051 | | | 15,155 |
| Current portion of debt | | | 1,563 | | | 1,571 |
| Deferred revenue | | | 13,522 | | | 18,358 |
| Total current liabilities | | | 143,204 | | | 173,572 |
| Long-term debt | | | 9,691 | | | 9,209 |
| Long-term deferred revenue | | | 5,073 | | | 4,932 |
| Other non-current liabilities | | | 14,294 | | | 49,709 |
| Total liabilities | | | 172,262 | | | 237,422 |
| Controlling interest | | | 22,279 | | | 22,031 |
| Stockholders' equity: | | | | |
| Class A common stock | | | 49 | | | 50 |
| Class B common stock | | | 61 | | | 61 |
| Additional paid-in capital | | | 375,830 | | | 392,999 |
| Retained earnings | | | 409,749 | | | 457,710 |
| Accumulated other comprehensive income | | | 11,467 | | | 16,358 |
| Total stockholders' equity | | | 797,156 | | | 867,178 |
| Total liabilities and stockholders' equity | | $ | 991,697 | | $ | 1,126,631 |
CONTACT:
Dolby Laboratories
Investor:
Alex Hughes, 415-645-4572
investor@dolby.com
or
Media:
Jeanne Alford, 415-645-5000
news@dolby.com
