Exhibit 99.1
Dolby Laboratories Reports FY 2007 Second Quarter Results
Second Quarter Net Income Tops $39 Million on Revenue of $129
Million
SAN FRANCISCO--(BUSINESS WIRE)--May 2, 2007--Dolby Laboratories,
Inc. (NYSE:DLB) today announced the Company's financial results for
the second quarter of fiscal year 2007.
For the second quarter, Dolby reported total revenue of $129.0
million, compared to $104.7 million for the second quarter of fiscal
2006, an increase of 23 percent. Second quarter net income was $39.1
million, or $0.34 per diluted share, compared to $28.0 million, or
$0.25 per diluted share, for the second quarter of fiscal 2006.
Net income for the second quarter of fiscal 2007 reflected
stock-based compensation expense of $4.8 million compared to $5.1
million in the second quarter of fiscal 2006.
In the first quarter of fiscal 2007 earnings call, Dolby disclosed
that it expected to resolve certain contractual matters with an
existing licensee. In the second quarter of fiscal 2007, the Company
resolved these contractual matters and recognized revenue of $7.7
million related to prior quarters.
"We have made great progress extending Dolby technologies into
newer markets, such as digital television. We continue to work closely
with content producers and consumer electronics manufacturers to
promote the creation and playback of an immersive digital experience
through Dolby technologies, whether in DVD, broadcast, personal
computer, gaming, digital cinema, or portable devices," said Bill
Jasper, President and Chief Executive Officer, Dolby Laboratories.
Guidance
For fiscal 2007, Dolby now expects revenue to be $435 million to
$450 million. Net income is now expected to be $110 million to $115
million. Consequently, earnings per diluted share are now expected to
be approximately $0.95 to $1.00. While stock-based compensation
expense may vary based on factors such as stock price or volatility,
Dolby continues to expect stock-based compensation expense for the
full year to be between $20 million and $22 million.
The Company's Conference Call Information
Members of Dolby management will lead a conference call open to
all interested parties to discuss Dolby's second quarter fiscal 2007
financial results at 2:00 p.m. PT/5:00 p.m. ET, Wednesday, May 2,
2007.
Access to the teleconference will be available over the Internet
from http://investor.dolby.com/medialist.cfm or by dialing
866-293-8970. International callers can access the conference call at
913-312-1230.
A replay of the call will be available beginning at 5:00 p.m. PT
on May 2, 2007 until 9 p.m. PT on May 9, 2007 at 888-203-1112
(international callers can access the replay by dialing 719-457-0820)
using confirmation code 7297634. An archived version of the
teleconference will also be available on www.dolby.com.
Forward Looking Statements
Certain statements in this press release, including statements
relating to Dolby's expectations regarding revenue, net income,
earnings per diluted share, and stock-based compensation expense for
the fiscal year ending September 28, 2007 and Dolby's expectations
concerning extending its technologies into newer markets and
continuing to work with content producers and consumer electronics
manufacturers to promote the creation and playback of an immersive
digital experience through Dolby technologies, and the benefits,
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, broadcast,
personal computer, gaming or portable device markets, and trends
relating to the development of additional and newer markets for Dolby
technologies; 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 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 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 Quarterly Report on Form 10-Q. 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 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(R) technologies, please visit www.dolby.com.
Dolby and the double-D symbol are registered trademarks of Dolby
Laboratories. S07/18268 DLB-F
DOLBY LABORATORIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal Quarter Fiscal Year-to-Date
Ended Ended
------------------- -------------------
March 31, March 30, March 31, March 30,
2006 2007 2006 2007
--------- --------- --------- ---------
(unaudited)
(in thousands, except per share
amounts)
Revenue:
Licensing $ 83,183 $106,642 $152,165 $189,017
Product sales 15,708 15,469 31,712 30,679
Services 5,833 6,899 11,872 13,756
--------- --------- --------- ---------
Total revenue 104,724 129,010 195,749 233,452
--------- --------- --------- ---------
Cost of revenue:
Cost of licensing 7,177 10,149 13,778 17,809
Cost of product sales (1) 6,883 7,714 19,564 16,400
Cost of services (1) 2,338 2,824 5,227 5,507
--------- --------- --------- ---------
Total cost of revenue 16,398 20,687 38,569 39,716
--------- --------- --------- ---------
Gross margin 88,326 108,323 157,180 193,736
--------- --------- --------- ---------
Operating expenses:
Selling, general and
administrative (1) 38,584 42,525 75,121 79,836
Research and development (1) 8,363 10,960 16,305 19,796
Gain on settlements - (1,500) - (1,500)
--------- --------- --------- ---------
Total operating expenses 46,947 51,985 91,426 98,132
--------- --------- --------- ---------
Operating income 41,379 56,338 65,754 95,604
Other income, net 4,594 5,932 8,293 11,359
--------- --------- --------- ---------
Income before provision for
income taxes and controlling
interest 45,973 62,270 74,047 106,963
Provision for income taxes 17,652 22,776 28,138 37,228
--------- --------- --------- ---------
Income before controlling
interest 28,321 39,494 45,909 69,735
Controlling interest in net
income (342) (399) (661) (747)
--------- --------- --------- ---------
Net income $ 27,979 $ 39,095 $ 45,248 $ 68,988
========= ========= ========= =========
Basic earnings per share $ 0.27 $ 0.36 $ 0.43 $ 0.64
Diluted earnings per share $ 0.25 $ 0.34 $ 0.41 $ 0.61
Weighted-average shares
outstanding (basic) 105,254 109,055 104,774 108,501
Weighted-average shares
outstanding (diluted) 111,387 113,412 111,056 113,165
(1) Stock-based compensation
included above was classified
as follows:
Cost of product sales $ 196 $ 192 $ 398 $ 410
Cost of services 126 31 256 68
Selling, general and
administrative 4,106 3,762 8,210 7,621
Research and development 663 772 1,336 1,519
DOLBY LABORATORIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 29, 2006 March 30, 2007
------------------ --------------
(unaudited)
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $363,537 $337,401
Short-term investments 122,162 194,992
Accounts receivable, net 23,550 30,889
Inventories 11,104 13,212
Income tax receivable 1,371 14,770
Deferred income taxes 44,568 45,860
Prepaid expenses and other current
assets 6,340 13,067
------------------ --------------
Total current assets 572,632 650,191
Property, plant and equipment, net 76,995 79,696
Intangible assets, net 14,954 14,625
Goodwill 23,188 24,524
Long-term investments 32,909 72,275
Long-term deferred income taxes 11,100 9,323
Other assets 7,510 8,668
------------------ --------------
Total assets $739,288 $859,302
================== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 79,336 $ 89,613
Income taxes payable 5,719 6,491
Current portion of debt 1,441 1,506
Deferred revenue 6,358 10,350
------------------ --------------
Total current liabilities 92,854 107,960
Long-term debt 10,893 10,351
Long-term deferred revenue 4,562 5,305
Other non-current liabilities 16,780 17,289
------------------ --------------
Total liabilities 125,089 140,905
Controlling interest 19,911 21,201
Stockholders' equity:
Class A common stock 37 40
Class B common stock 70 69
Additional paid-in capital 323,449 352,740
Retained earnings 266,918 335,906
Accumulated other comprehensive
income 3,814 8,441
------------------ --------------
Total stockholders' equity 594,288 697,196
------------------ --------------
Total liabilities and
stockholders' equity $739,288 $859,302
================== ==============
CONTACT: Dolby Laboratories
Alex Hughes, 415-645-4572 (Investors)
investor@dolby.com
Paula Dunn, 415-645-5000 (Media)
news@dolby.com