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Dolby Laboratories Reports FY 2008 Fourth Quarter and Year-End Results
SAN FRANCISCO, Nov 06, 2008 (BUSINESS WIRE) -- Dolby Laboratories, Inc. (NYSE:DLB) today announced the Company's financial results for the fourth quarter and fiscal year ended September 26, 2008.
For the fourth quarter, Dolby reported total revenue of $163.1 million, compared to $129.0 million for the fourth quarter of fiscal 2007, an increase of 26 percent. Fourth quarter net income was $48.6 million, or $0.42 per diluted share, compared to $44.2 million, or $0.39 per diluted share, for the fourth quarter of fiscal 2007.
For fiscal year 2008, Dolby reported total revenue of $640.2 million, compared to $482.0 million for fiscal year 2007, an increase of 33 percent. Net income for fiscal year 2008 was $199.5 million, or $1.74 per diluted share, compared to $142.8 million, or $1.26 per diluted share, for fiscal year 2007.
Net income for the fourth quarter and fiscal year 2008 reflects stock-based compensation expense of $5.5 million and $22.7 million, respectively, compared to $5.1 million and $19.8 million for the same periods in fiscal 2007.
Net income for the fourth quarter and fiscal year 2008 also reflects charges related to the amortization of intangibles of $3.1 million and $12.5 million, respectively, compared to $1.3 million and $3.3 million for the same periods in fiscal 2007.
"Fiscal 2008 was a strong year for us, as we continued to benefit from the adoption of Dolby technologies globally," said Bill Jasper, President and Chief Executive Officer of Dolby Laboratories. "We finished fiscal 2008 with excellent profitability, a strong balance sheet, a global brand, and a continued focus on driving the adoption of existing and new technologies across our markets."
Dolby expects fiscal 2009 revenue to be $660 million to $720 million. Net income is expected to be $184 million to $208 million. Earnings per diluted share are expected to be $1.57 to $1.77. Included in Dolby's fiscal 2009 earnings guidance is approximately $5.0 million in estimated restructuring charges for the consolidation of manufacturing operations. The impact of this restructuring charge on net income is approximately $3.0 million, or $0.03 per diluted share. 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 approximately $25 million. In addition, Dolby expects charges related to the amortization of intangibles for fiscal 2009 to be approximately $13 million.
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 2008 year-end financial results at 2:00 p.m. PT/5:00 p.m. ET, Thursday, November 6, 2008.
Access to the teleconference will be available over the Internet from http://investor.dolby.com/medialist.cfm or by dialing 888-205-6875. International callers can access the conference call at 913-981-5582.
A replay of the call will be available beginning at 5:00 p.m. PT on November 6, 2008 until 9:00 p.m. PT on November 13, 2008 at 888-203-1112 (international callers can access the replay at 719-457-0820) using confirmation code 1214655. An archived version of the teleconference will also be available on www.dolby.com.
Certain statements in this press release, including statements relating to Dolby's expectations regarding revenue, net income, earnings per diluted share, stock-based compensation expense and charges relating to the amortization of intangibles, for the fiscal year ending September 25, 2009, and the expected future benefits from our global brand and driving adoption of our existing and new technologies, 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 trends related to DVD and Blu-ray Disc(TM), broadcast, personal computer, gaming, mobile, or portable device markets, and trends relating to the development of additional and newer markets for Dolby technologies; general economic risks both domestically and internationally; 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, including countries that have historically limited recognition and enforcement of intellectual property and contractual rights; risks associated with 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, including 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 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) is the global leader in technologies that are essential elements in the best entertainment experiences. Founded in 1965 and best known for high-quality audio and surround sound, Dolby(R) innovations enrich entertainment at the movies, at home, or on the go. Visit www.dolby.com for more information.
Dolby and the double-D symbol are registered trademarks of Dolby Laboratories. All other trademarks remain the property of their respective owners. S08/20618 DLB-F
DOLBY LABORATORIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Quarter Ended Fiscal Year-to-Date Ended September 28, September 26, September 28, September 26, 2007 2008 2007 2008 (unaudited) (in thousands, except per share amounts) Revenue: Licensing $ 103,305 $ 137,756 $ 387,117 $ 537,363 Product sales 19,617 18,586 67,487 72,284 Services 6,041 6,788 27,424 30,584 Total revenue 128,963 163,130 482,028 640,231 Cost of revenue: Cost of licensing 2,151 3,623 28,438 15,802 Cost of product sales (1) 9,978 9,806 34,497 39,455 Cost of services (1) 2,860 3,120 11,330 12,520 Total cost of revenue 14,989 16,549 74,265 67,777 Gross margin 113,974 146,581 407,763 572,454 Operating expenses: Selling, general and administrative (1) 50,536 62,815 178,802 224,090 Research and development (1) 12,459 17,082 44,109 62,080 Gain on settlements (250 ) - (2,100 ) (499 ) Total operating expenses 62,745 79,897 220,811 285,671 Operating income 51,229 66,684 186,952 286,783 Other income, net 5,346 4,750 22,464 15,019 Income before provision for income taxes and controlling interest 56,575 71,434 209,416 301,802 Provision for income taxes (12,064 ) (22,254 ) (65,131 ) (100,770 ) Income before controlling interest 44,511 49,180 144,285 201,032 Controlling interest in net income, net of tax (353 ) (621 ) (1,454 ) (1,574 ) Net income $ 44,158 $ 48,559 $ 142,831 $ 199,458 Basic earnings per share $ 0.40 $ 0.43 $ 1.31 $ 1.79 Diluted earnings per share $ 0.39 $ 0.42 $ 1.26 $ 1.74 Weighted-average shares outstanding (basic) 110,112 112,342 109,202 111,492 Weighted-average shares outstanding (diluted) 114,118 115,010 113,573 114,781 (1) Stock-based compensation included above was classified as follows: Cost of product sales $ 232 $ 183 $ 911 $ 853 Cost of services 41 51 148 177 Selling, general and administrative 3,875 4,110 15,334 17,267 Research and development 936 1,136 3,448 4,413
DOLBY LABORATORIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 28, 2007 September 26, 2008 (unaudited) (in thousands) ASSETS Current assets: Cash and cash equivalents $ 368,467 $ 394,761 Short-term investments 231,217 119,667 Accounts receivable, net 28,165 27,650 Inventories 14,883 18,133 Deferred taxes 73,686 91,824 Prepaid expenses and other current assets 17,000 39,834 Total current assets 733,418 691,869 Property, plant and equipment, net 85,552 87,915 Intangible assets, net 35,389 83,060 Goodwill 39,364 250,356 Long-term investments 73,224 180,996 Deferred taxes 12,393 24,900 Other assets 12,357 17,050 Total assets $ 991,697 $ 1,336,146 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 119,068 $ 156,925 Income taxes payable 9,051 4,811 Current portion of long-term debt 1,563 1,593 Deferred revenue 13,522 37,344 Total current liabilities 143,204 200,673 Long-term debt 9,691 7,782 Long-term deferred revenue 5,073 6,171 Deferred taxes - 16,755 Other non-current liabilities 14,294 33,414 Total liabilities 172,262 264,795 Controlling interest 22,279 22,098 Stockholders' equity: Class A common stock 49 52 Class B common stock 61 60 Additional paid-in capital 375,830 434,907 Retained earnings 409,749 609,495 Accumulated other comprehensive income 11,467 4,739 Total stockholders' equity 797,156 1,049,253 Total liabilities and stockholders' equity $ 991,697 $ 1,336,146
SOURCE: Dolby Laboratories, Inc.
Dolby Laboratories Alex Hughes, 415-645-4572 (Investors) firstname.lastname@example.org Jeanne Alford, 415-645-5000 (Media) email@example.com
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