Exhibit 99.1
Dolby Laboratories Reports FY 2007 Fourth Quarter and Year-End Results
Fiscal 2007 Revenue Grows 23 Percent Year-Over-Year
SAN FRANCISCO--(BUSINESS WIRE)--Nov. 8, 2007--Dolby Laboratories,
Inc. (NYSE:DLB) today announced the Company's financial results for
the fourth quarter and fiscal year ended September 28, 2007.
For the fourth quarter, Dolby reported total revenue of $129.0
million, compared to $102.1 million for the fourth quarter of fiscal
2006, an increase of 26 percent. Fourth quarter net income was $44.2
million, or $0.39 per diluted share, compared to $25.2 million, or
$0.22 per diluted share, for the fourth quarter of fiscal 2006.
For fiscal year 2007, Dolby reported total revenue of $482.0
million, compared to $391.5 million for fiscal year 2006, an increase
of 23 percent. Net income for fiscal year 2007 was $142.8 million, or
$1.26 per diluted share, compared to $89.5 million, or $0.80 per
diluted share, for fiscal year 2006.
Net income for the fourth quarter of fiscal 2007 reflected
stock-based compensation expense of $5.1 million compared to $4.2
million for the fourth quarter of fiscal 2006. Net income for fiscal
2007 reflected $19.8 million of stock-based compensation expense,
compared with $19.1 million for fiscal 2006.
"I am very pleased with the hard work by the Dolby team in fiscal
2007. We finished the year with increased profitability, a strong
position across our core markets, and with progress in our new
initiatives, such as mobile, digital cinema, and video," said Bill
Jasper, President and Chief Executive Officer, Dolby Laboratories. "In
addition, we continue to position ourselves for the future. Today, we
entered into a definitive agreement to acquire Coding Technologies, a
privately held provider of audio compression technologies for the
mobile, digital broadcast, and Internet markets."
Guidance
Dolby expects fiscal 2008 revenue to be $560 million to $600
million, which includes approximately $20 million in anticipated
licensing revenue from Coding Technologies. Net income is expected to
be $148 million to $160 million. Earnings per diluted share are
expected to be $1.27 to $1.37. While under FAS 123R, stock-based
compensation expense may vary based on factors such as stock price or
volatility, Dolby expects stock-based compensation expense for the
full year to be $18 million to $20 million. In addition, Dolby expects
charges related to the amortization of intangibles for fiscal 2008 to
be approximately $13 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' Q4 and fiscal
2007 year-end financial results at 2:00 p.m. PT/5:00 p.m. ET,
Thursday, November 8, 2007.
Access to the teleconference will be available over the Internet
from http://investor.dolby.com/medialist.cfm or by dialing
888-715-1397. International callers can access the conference call at
913-312-1438.
A replay of the call will be available beginning at 5:00 p.m. PT
on November 8, 2007 until 9:00 p.m. PT on November 15, 2007 at
888-203-1112 (international callers can access the replay by dialing
719-457-0820) using confirmation code 8475752. 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, including revenue
generated by Coding Technologies, 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 and Dolby's progress in new initiatives, including mobile,
digital cinema, and video, and Dolby's positioning for the future,
including its acquisition of Coding 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, mobile, 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 and successfully integrating businesses or technologies,
including Coding 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(R) technologies, please visit www.dolby.com.
Dolby and the double-D symbol are registered trademarks of Dolby
Laboratories. S07/18926 DLB-F
DOLBY LABORATORIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal Quarter Ended Fiscal Year Ended
-------------------- -------------------
September September September September
29, 28, 29, 28,
2006 2007 2006 2007
---------- --------- --------- ---------
(unaudited)
(in thousands, except per share amounts)
Revenue:
Licensing $ 80,360 $103,305 $301,663 $387,117
Product sales 14,839 19,617 65,413 67,487
Services 6,944 6,041 24,466 27,424
---------- --------- --------- ---------
Total revenue 102,143 128,963 391,542 482,028
---------- --------- --------- ---------
Cost of revenue:
Cost of licensing 7,101 2,151 26,887 28,438
Cost of product sales (1) 8,733 9,978 38,487 34,497
Cost of services (1) 2,755 2,860 10,668 11,330
---------- --------- --------- ---------
Total cost of revenue 18,589 14,989 76,042 74,265
---------- --------- --------- ---------
Gross margin 83,554 113,974 315,500 407,763
---------- --------- --------- ---------
Operating expenses:
Selling, general and
administrative (1) 40,567 50,536 154,165 178,802
Research and development
(1) 9,964 12,459 35,377 44,109
Gain on settlements (3,625) (250) (3,625) (2,100)
---------- --------- --------- ---------
Total operating expenses 46,906 62,745 185,917 220,811
---------- --------- --------- ---------
Operating income 36,648 51,229 129,583 186,952
Other income, net 4,741 5,346 17,054 22,464
---------- --------- --------- ---------
Income before provision for
income taxes and controlling
interest 41,389 56,575 146,637 209,416
Provision for income taxes 15,917 12,064 55,833 65,131
---------- --------- --------- ---------
Income before controlling
interest 25,472 44,511 90,804 144,285
Controlling interest in net
income (255) (353) (1,255) (1,454)
---------- --------- --------- ---------
Net income $ 25,217 $ 44,158 $ 89,549 $142,831
========== ========= ========= =========
Basic earnings per share $ 0.24 $ 0.40 $ 0.85 $ 1.31
Diluted earnings per share $ 0.22 $ 0.39 $ 0.80 $ 1.26
Weighted-average shares
outstanding (basic) 106,964 110,112 105,688 109,202
Weighted-average shares
outstanding (diluted) 112,150 114,118 111,658 113,573
(1) Stock-based compensation
included above was
classified as follows:
Cost of product sales $ 201 $ 232 $ 800 $ 911
Cost of services 128 41 513 148
Selling, general and
administrative 3,146 3,875 15,087 15,334
Research and development 723 936 2,738 3,448
DOLBY LABORATORIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 29, September 28,
2006 2007
------------- -------------
(unaudited)
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 363,537 $ 368,467
Short-term investments 122,162 231,217
Accounts receivable, net 23,550 28,165
Inventories 11,104 14,883
Deferred income taxes 44,568 73,686
Prepaid expenses and other current
assets 7,711 17,000
------------- -------------
Total current assets 572,632 733,418
Property, plant and equipment, net 76,995 85,552
Intangible assets, net 14,954 35,389
Goodwill 23,188 39,364
Long-term investments 32,909 73,224
Long-term deferred income taxes 11,100 12,393
Other assets 7,510 12,357
------------- -------------
Total assets $ 739,288 $ 991,697
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities 79,336 119,068
Income taxes payable 5,719 9,051
Current portion of debt 1,441 1,563
Deferred revenue 6,358 13,522
------------- -------------
Total current liabilities 92,854 143,204
Long-term debt 10,893 9,691
Long-term deferred revenue 4,563 5,073
Other non-current liabilities 16,779 14,294
------------- -------------
Total liabilities 125,089 172,262
Controlling interest 19,911 22,279
Stockholders' equity:
Class A common stock 37 49
Class B common stock 70 61
Additional paid-in capital 323,449 375,830
Retained earnings 266,918 409,749
Accumulated other comprehensive income 3,814 11,467
------------- -------------
Total stockholders' equity 594,288 797,156
------------- -------------
Total liabilities and stockholders'
equity $ 739,288 $ 991,697
============= =============
CONTACT: Dolby Laboratories
Alex Hughes, 415-645-4572 (Investors)
investor@dolby.com
Paula Dunn, 415-645-5000 (Media)
news@dolby.com