EX-99.1 2 a5323809ex991.txt DOLBY LABORATORIES, INC. EXHIBIT 99.1 Exhibit 99.1 Dolby Laboratories Reports FY 2007 First Quarter Results First Quarter Net Income is $29.9 Million on Revenue of $104.4 Million SAN FRANCISCO--(BUSINESS WIRE)--Feb. 1, 2007--Dolby Laboratories, Inc. (NYSE:DLB) today announced the Company's financial results for the first quarter of fiscal year 2007. For the first quarter, Dolby reported total revenue of $104.4 million, compared to $91.0 million for the first quarter of fiscal 2006, an increase of 15 percent. First quarter net income was $29.9 million, or $0.27 per diluted share, compared to $17.3 million, or $0.16 per diluted share, for the first quarter of fiscal 2006. Net income for the first quarter of fiscal 2007 reflected stock-based compensation expense of $4.9 million compared to $5.1 million in the first quarter of fiscal 2006. "With Dolby's recognized global brand, broad industry presence, and solid business model, we entered fiscal 2007 in a strong position. With the first quarter completed, I am encouraged by our continued progress. We continue to extend our technologies throughout newer markets, to drive the adoption of additional Dolby technologies, and to innovate," said Bill Jasper, President and Chief Executive Officer, Dolby Laboratories. Guidance For fiscal 2007, Dolby continues to expect revenue to be $420 million to $450 million. Net income is now expected to be $100 million to $110 million. Consequently, earnings per diluted share are now expected to be $0.88 to $0.96. 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 $20 million to $22 million. Conference Call Information Members of Dolby management will lead a conference call open to all interested parties to discuss Dolby's first quarter fiscal 2007 financial results at 2:00 p.m. PT/5:00 p.m. ET, Thursday, February 1, 2007. Access to the teleconference will be available over the Internet from http://investor.dolby.com/medialist.cfm or by dialing 800-289-0529. International callers can access the conference call at 913-981-5523. A replay of the call will be available beginning at 5:00 p.m. PT on February 1, 2007 until 9 p.m. PT on February 8, 2007, at 888-203-1112 (international callers can access the replay by dialing 719-457-0820) and entering confirmation code 9143132. An archived version of the teleconference will also be available on Dolby's website, www.dolby.com.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 extending its technologies into newer markets, driving the adoption of additional Dolby technologies, and continuing to innovate, 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 DVD markets; pricing pressures; the development of the markets for PCs, broadcast, gaming, automotive, and portable audio and video players that incorporate Dolby's technologies; 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; 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 Annual Report on Form 10-K and any subsequent Quarterly Reports 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 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. S07/17915 DLB-F DOLBY LABORATORIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Quarter Ended ----------------------------- December 30, December 29, 2005 2006 -------------- -------------- (unaudited) (in thousands, except per share amounts) Revenue: Licensing $68,982 $82,375 Product sales 16,004 15,210 Services 6,039 6,857 ---------------------------------------------------------------------- Total revenue 91,025 104,442 Cost of revenue: Cost of licensing 6,601 7,660 Cost of product sales (1) 12,681 8,686 Cost of services (1) 2,889 2,683 ---------------------------------------------------------------------- Total cost of revenue 22,171 19,029 Gross margin 68,854 85,413 Operating expenses: Selling, general and administrative (1) 36,537 37,311 Research and development (1) 7,942 8,836 ---------------------------------------------------------------------- Total operating expenses 44,479 46,147 ---------------------------------------------------------------------- Operating income 24,375 39,266 Other income, net 3,699 5,427 ---------------------------------------------------------------------- Income before provision for income taxes and controlling interest 28,074 44,693 Provision for income taxes 10,486 14,452 ---------------------------------------------------------------------- Income before controlling interest 17,588 30,241 Controlling interest in net income (319) (348) ---------------------------------------------------------------------- Net income $17,269 $29,893 ---------------------------------------------------------------------- Basic net income per share $0.17 $0.28 Diluted net income per share $0.16 $0.27 ---------------------------------------------------------------------- Weighted-average shares outstanding (basic) 104,295 107,947 Weighted-average shares outstanding (diluted) 110,190 112,767 ---------------------------------------------------------------------- (1) Stock-based compensation included in net income above was classified as follows: Cost of product sales $202 $218 Cost of services 130 37 Selling, general and administrative 4,104 3,859 Research and development 673 747 DOLBY LABORATORIES, INC. CONSOLIDATED BALANCE SHEETS September 29, December 29, 2006 2006 -------------- -------------- (unaudited) (in thousands) ASSETS Current assets: Cash and cash equivalents $412,487 $409,265 Short-term investments 73,212 119,129 Accounts receivable, net 23,550 16,886 Inventories 11,104 11,585 Income tax receivable 1,371 1,586 Deferred income taxes 44,568 44,980 Prepaid expenses and other current assets 6,340 8,358 ---------------------------------------------------------------------- Total current assets 572,632 611,789 Property, plant and equipment, net 76,995 77,179 Intangible assets, net 14,954 14,426 Goodwill 23,188 24,331 Long-term investments 32,909 50,078 Long-term deferred income taxes 11,100 10,013 Other assets 7,510 7,797 ---------------------------------------------------------------------- Total assets $739,288 $795,613 ---------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $79,336 $81,130 Income taxes payable 5,719 6,336 Current portion of debt 1,441 1,483 Deferred revenue 6,358 7,559 ---------------------------------------------------------------------- Total current liabilities 92,854 96,508 Long-term debt 10,893 10,697 Other non-current liabilities 21,342 21,661 ---------------------------------------------------------------------- Total liabilities 125,089 128,866 Controlling interest 19,911 20,754 Stockholders' equity: Class A common stock 37 39 Class B common stock 70 69 Additional paid-in capital 323,449 341,400 Retained earnings 266,918 296,811 Accumulated other comprehensive income 3,814 7,674 ---------------------------------------------------------------------- Total stockholders' equity 594,288 645,993 ---------------------------------------------------------------------- Total liabilities and stockholders' equity $739,288 $795,613 ---------------------------------------------------------------------- CONTACT: Dolby Laboratories Investor Contact: Alex Hughes, 415-645-4572 investor@dolby.com Media Contact: Paula Dunn, 415-645-5000 news@dolby.com