Exhibit 99.1
Dolby Laboratories Reports FY 2007 Third-Quarter Results
Third-Quarter Revenue up 28 Percent Year-over-Year
SAN FRANCISCO--(BUSINESS WIRE)--Aug. 1, 2007--Dolby Laboratories,
Inc. (NYSE:DLB) today announced the Company's financial results for
the third quarter of fiscal year 2007.
For the third quarter, Dolby reported total revenue of $119.6
million, compared to $93.7 million for the third quarter of fiscal
2006, an increase of 28 percent. Third-quarter net income was $29.7
million, or $0.26 per diluted share, compared to $19.1 million, or
$0.17 per diluted share, for the third quarter of fiscal 2006.
Net income for the third quarter reflected stock-based
compensation expense of $5.1 million compared to $4.7 million in the
third quarter of fiscal 2006.
"Our third-quarter results demonstrate the strength of Dolby's
business model, as we continue to diversify our revenue across newer
markets," said Bill Jasper, President and Chief Executive Officer,
Dolby Laboratories. "Dolby(R) technology is an essential element in
the entertainment experience, and as digital entertainment expands
across multiple platforms, Dolby continues to benefit."
Guidance
For fiscal 2007, Dolby now expects revenue to be approximately
$465 million to $475 million. Net income is now expected to be
approximately $122 million to $127 million. Consequently, earnings per
diluted share are now expected to be approximately $1.07 to $1.11.
While 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 approximately $21
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 third-quarter fiscal 2007
financial results at 2 p.m. PT/5 p.m. ET, Wednesday, August 1, 2007.
Access to the teleconference will be available over the Internet
from http://investor.dolby.com/medialist.cfm or by dialing
877-704-5381. International callers can access the conference call at
913-312-1295.
A replay of the call will be available beginning at 5 p.m. PT on
August 1, 2007 until 9 p.m. PT on August 8, 2007 at 888-203-1112
(international callers can access the replay by dialing 719-457-0820)
using confirmation code 1983417. An archived version of the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, net income,
earnings per diluted share, and stock-based compensation expense for
the fiscal year ending September 28, 2007 and Dolby's expectations
concerning the strength of its business model, the diversification of
its revenues across new markets, the expansion of digital
entertainment across multiple platforms, Dolby's role as an essential
element in the entertainment experience, 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 (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. S07/18523 DLB-F
DOLBY LABORATORIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal Quarter Ended Fiscal Year-to-Date Ended
-------------------- -------------------------
June 30, June 29, June 30, June 29,
2006 2007 2006 2007
---------- --------- --------------- ---------
(unaudited)
(in thousands, except per share amounts)
Revenue:
Licensing $ 69,138 $ 94,795 $ 221,303 $283,812
Product sales 18,862 17,191 50,574 47,870
Services 5,650 7,627 17,522 21,383
---------- --------- --------------- ---------
Total revenue 93,650 119,613 289,399 353,065
---------- --------- --------------- ---------
Cost of revenue:
Cost of licensing 6,008 8,478 19,786 26,287
Cost of product
sales(1) 10,190 8,119 29,754 24,519
Cost of services(1) 2,686 2,963 7,913 8,470
---------- --------- --------------- ---------
Total cost of
revenue 18,884 19,560 57,453 59,276
---------- --------- --------------- ---------
Gross margin 74,766 100,053 231,946 293,789
---------- --------- --------------- ---------
Operating expenses:
Selling, general
and
administrative(1) 38,477 48,430 113,598 128,266
Research and
development(1) 9,108 11,854 25,413 31,650
Gain on settlements - (350) - (1,850)
---------- --------- --------------- ---------
Total operating
expenses 47,585 59,934 139,011 158,066
---------- --------- --------------- ---------
Operating income 27,181 40,119 92,935 135,723
Other income, net 4,020 5,759 12,313 17,118
---------- --------- --------------- ---------
Income before provision
for income taxes and
controlling interest 31,201 45,878 105,248 152,841
Provision for income
taxes 11,778 15,839 39,916 53,067
---------- --------- --------------- ---------
Income before
controlling interest 19,423 30,039 65,332 99,774
Controlling interest in
net income (339) (354) (1,000) (1,101)
---------- --------- --------------- ---------
Net income $ 19,084 $ 29,685 $ 64,332 $ 98,673
========== ========= =============== =========
Basic earnings per
share $ 0.18 $ 0.27 $ 0.61 $ 0.91
Diluted earnings per
share $ 0.17 $ 0.26 $ 0.58 $ 0.87
Weighted-average shares
outstanding (basic) 106,238 109,692 105,262 108,898
Weighted-average shares
outstanding (diluted) 111,983 113,696 111,446 113,389
(1) Stock-based
compensation included
above was classified
as follows:
Cost of product
sales $ 201 $ 269 $ 599 $ 679
Cost of services 129 39 385 107
Selling, general
and administrative 3,731 3,838 11,941 11,459
Research and
development 679 993 2,015 2,512
DOLBY LABORATORIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 29, June 29,
2006 2007
------------- --------
(unaudited)
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 363,537 $325,909
Short-term investments 122,162 210,548
Accounts receivable, net 23,550 25,021
Inventories 11,104 14,091
Income tax receivable 1,371 20,875
Deferred income taxes 44,568 57,831
Prepaid expenses and other current assets 6,340 13,819
------------- --------
Total current assets 572,632 668,094
Property, plant and equipment, net 76,995 81,457
Intangible assets, net 14,954 33,028
Goodwill 23,188 41,908
Long-term investments 32,909 80,047
Long-term deferred income taxes 11,100 11,015
Other assets 7,510 8,151
------------- --------
Total assets $ 739,288 $923,700
============= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 79,336 $103,223
Income taxes payable 5,719 6,233
Current portion of debt 1,441 1,528
Deferred revenue 6,358 11,927
------------- --------
Total current liabilities 92,854 122,911
Long-term debt 10,893 10,037
Long-term deferred tax liability - 6,312
Long-term deferred revenue 4,563 5,072
Other non-current liabilities 16,779 14,274
------------- --------
Total liabilities 125,089 158,606
Controlling interest 19,911 21,825
Stockholders' equity:
Class A common stock 37 49
Class B common stock 70 61
Additional paid-in capital 323,449 365,907
Retained earnings 266,918 365,591
Accumulated other comprehensive income 3,814 11,661
------------- --------
Total stockholders' equity 594,288 743,269
------------- --------
Total liabilities and stockholders'
equity $ 739,288 $923,700
============= ========
CONTACT: Dolby Laboratories
Alex Hughes, 415-645-4572 (Investor)
investor@dolby.com
Paula Dunn, 415-645-5000 (Media)
news@dolby.com