Dolby Laboratories, Inc.
Dolby Laboratories, Inc. (Form: 8-K, Received: 05/01/2008 16:06:26)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 1, 2008



DOLBY LABORATORIES, INC.
(Exact name of registrant as specified in its charter)

Delaware

001-32431

90-0199783

(State or other jurisdiction of

incorporation)

 

(Commission

File Number)

(IRS Employer

Identification No.)

100 Potrero Avenue

San Francisco, CA 94103-4813

(Address of principal executive offices) (Zip Code)

(415) 558-0200
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below) :

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Section 2 – Financial Information

ITEM 2.02     Results of Operations and Financial Condition.

The following information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On May 1, 2008, Dolby Laboratories, Inc. issued a press release announcing its financial results for its second quarter ended March 28, 2008. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Section 9 – Financial Statements and Exhibits

ITEM 9.01     Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is furnished herewith:

Exhibit No.

 

Description

 
99.1 Press Release of Dolby Laboratories, Inc. dated May 1, 2008


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

DOLBY LABORATORIES, INC.

 

 

 

By:

  /s/ Kevin J. Yeaman      

Kevin J. Yeaman

Chief Financial Officer

 

Date:

May 1, 2008


EXHIBIT INDEX

Exhibit No.

Description

 
99.1

Press Release of Dolby Laboratories, Inc. dated May 1, 2008

Exhibit 99.1

Dolby Laboratories Reports Second-Quarter Fiscal 2008 Results

Second-quarter EPS grows 44 percent year-over-year

SAN FRANCISCO--(BUSINESS WIRE)--Dolby Laboratories, Inc. (NYSE:DLB) today announced the Company's financial results for its second quarter of fiscal 2008.

For the second quarter, Dolby reported total revenue of $172.6 million, compared to $129.0 million for the second quarter of fiscal 2007, an increase of 34 percent. Second-quarter net income was $56.8 million, or $0.49 per diluted share, compared to $39.1 million, or $0.34 per diluted share, for the second quarter of fiscal 2007.

Net income for the second quarter of fiscal 2008 reflects stock-based compensation expense of $6.1 million compared to $4.8 million for the second quarter of fiscal 2007. Net income for the second quarter of fiscal 2008 also reflects charges related to the amortization of intangibles of $4.1 million, compared to $0.6 million for the second quarter of fiscal 2007.

"We experienced another strong quarter across many of our global markets, including PC, gaming, and broadcast,” said Bill Jasper, President and Chief Executive Officer, Dolby Laboratories. "With our position in entertainment technology, we remain focused on developing and delivering innovations that improve the digital media experience.”

Guidance

Dolby now expects fiscal 2008 revenue to be $585 million to $615 million. Net income is now expected to be $170 million to $182 million. Earnings per diluted share is now expected to be $1.47 to $1.57. While under FAS 123R 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 $22 million. In addition, Dolby now expects charges related to the amortization of intangibles for fiscal 2008 to be approximately $13 million.

As part of Dolby’s updated fiscal 2008 guidance, Dolby now expects increased licensing revenue and lower products and services revenue compared to its prior expectations. The higher licensing revenue expectations are the result of expected increased revenue from the PC market, while the lower products and services revenue expectations are due to the expectation that product revenue related to digital cinema will be deferred through fiscal 2008. Since licensing revenue carries a significantly higher margin than products and services revenue, Dolby now expects profitability to be higher in fiscal 2008 than its prior guidance.


The Company's Conference Call Information

Members of Dolby management will lead a conference call open to all interested parties to discuss Dolby Laboratories’ Q2 fiscal 2008 financial results at 2:00 p.m. PT/5:00 p.m. ET, Thursday, May 1, 2008.

Access to the teleconference will be available over the Internet from http://investor.dolby.com/medialist.cfm or by dialing 888-713-3588. International callers can access the conference call at 913-981-4903.

A replay of the call will be available beginning at 5:00 p.m. PT on May 1 until 9:00 p.m. PT on May 8, 2008; dial 888-203-1112 (international callers can access the replay by dialing 719-457-0820) and enter confirmation code 9142240. 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, including licensing revenue and products and services revenue, net income, earnings per diluted share, margin, stock-based compensation expense, charges relating to the amortization of intangibles, the licensing revenue related to the performance of the PC market and the deferral of product revenue related to digital cinema for the fiscal year ending September 26, 2008, Dolby’s strength across its global markets, Dolby’s position in entertainment technology and focus on developing and delivering innovations that improve the digital media experience, 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 and next-generation DVD, broadcast, personal computer, gaming, mobile, or portable device markets, and trends relating to the development of additional and newer markets for Dolby technologies; the timing and effects of economic downturns in the United States and abroad; 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, 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 by 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) develops and delivers products and technologies around the world 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. S08/19736 DLB-F


DOLBY LABORATORIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
       
 
Fiscal Quarter Ended Fiscal Year-to-Date Ended
March 30, 2007 March 28, 2008 March 30, 2007 March 28, 2008
(unaudited)
(in thousands, except per share amounts)
Revenue:
Licensing $ 106,642 $ 149,619 $ 189,017 $ 272,049
Product sales 15,469 15,628 30,679 35,638
Services   6,899     7,310     13,756     15,097  
Total revenue   129,010     172,557     233,452     322,784  
 
Cost of revenue:
Cost of licensing 10,149 5,555 17,809 8,818

Cost of product sales (1)

7,714 8,540 16,400 20,188

Cost of services (1)

  2,824     3,151     5,507     6,206  
Total cost of revenue   20,687     17,246     39,716     35,212  
Gross margin   108,323     155,311     193,736     287,572  
Operating expenses:

Selling, general and administrative (1)

42,525 55,310 79,836 106,296

Research and development (1)

10,960 15,725 19,796 29,632
Gain on settlements   (1,500 )   (249 )   (1,500 )   (249 )
Total operating expenses   51,985     70,786     98,132     135,679  
Operating income 56,338 84,525 95,604 151,893
Other income, net   5,932     2,404     11,359     7,608  
Income before provision for income taxes and controlling interest 62,270 86,929 106,963 159,501
Provision for income taxes   (22,776 )   (29,792 )   (37,228 )   (54,399 )
Income before controlling interest 39,494 57,137 69,735 105,102
Controlling interest in net income, net of tax   (399 )   (359 )   (747 )   (651 )
Net income $ 39,095   $ 56,778   $ 68,988   $ 104,451  
 
 
Basic earnings per share $ 0.36 $ 0.51 $ 0.64 $ 0.94
Diluted earnings per share $ 0.34 $ 0.49 $ 0.61 $ 0.91
 
Weighted-average shares outstanding (basic) 109,055 111,192 108,501 110,892
Weighted-average shares outstanding (diluted) 113,412 114,736 113,165 114,579
 
 

(1) Stock-based compensation included above was classified as follows:

Cost of product sales $ 192 $ 262 $ 410 $ 503
Cost of services 31 38 68 78
Selling, general and administrative 3,762 4,600 7,621 8,895
Research and development 772 1,229 1,519 2,119

DOLBY LABORATORIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
   
September 28, 2007 March 28, 2008
(unaudited)
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 368,467 $ 347,502
Short-term investments 231,217 28,905
Accounts receivable, net 28,165 43,399
Inventories 14,883 20,153
Deferred income taxes 73,686 81,874
Prepaid expenses and other current assets   17,000   27,596
Total current assets 733,418 549,429
 
Property, plant and equipment, net 85,552 84,565
Intangible assets, net 35,389 93,863
Goodwill 39,364 272,542
Long-term investments 73,224 165,880
Long-term deferred income taxes 12,393 11,956
Other assets   12,357   13,033
Total assets $ 991,697 $ 1,191,268
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 119,068 $ 131,006
Income taxes payable 9,051 2,069
Current portion of long-term debt 1,563 1,591
Deferred revenue   13,522   24,594
Total current liabilities 143,204 159,260
 
Long-term debt 9,691 8,810
Long-term deferred revenue 5,073 5,221
Deferred income tax liability - 19,001
Other non-current liabilities   14,294   28,914
Total liabilities 172,262 221,206
 
Controlling interest 22,279 22,392
Stockholders' equity:
Class A common stock 49 51
Class B common stock 61 61
Additional paid-in capital 375,830 407,599
Retained earnings 409,749 514,488
Accumulated other comprehensive income   11,467   25,471
Total stockholders' equity   797,156   947,670
Total liabilities and stockholders' equity $ 991,697 $ 1,191,268

CONTACT:
Dolby Laboratories (Investor)
Alex Hughes, 415-645-4572
investor@dolby.com
or
Dolby Laboratories (Media)
Jeanne Alford, 415-645-5000
news@dolby.com