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Dolby Laboratories Reports Fiscal 2012 Fourth Quarter and Year-End Financial Results
Key technologies enhancing mobile and connected entertainment
position
Fourth quarter GAAP net income was
Fiscal year GAAP net income was
"Fourth quarter revenue came in higher than expected, primarily due to
strength in mobile devices," said
Financial Outlook
Fiscal Year 2013
For fiscal 2013,
For fiscal 2013,
Q1 2013
For fiscal Q1 2013,
For fiscal Q1 2013,
The Company's effective tax rate is estimated to be approximately 28 percent for fiscal Q1 2013.
Diluted Earnings per Share
The Company's Conference Call Information
Members of
Access to the teleconference will be available over the Internet from http://investor.dolby.com/medialist.cfm or by dialing 1-888-504-7953. International callers can access the conference call at 1-719-457-2647.
A replay of the call will be available from
Non-GAAP Financial Information
To supplement Dolby's financial statements presented on a GAAP basis,
Forward-Looking Statements
Certain statements in this press release, including statements relating
to Dolby's expectations regarding revenue, gross margin, operating
expense, tax rate, stock-based compensation, amortization of
intangibles, restructuring charges, and diluted earnings per share for
fiscal 2013, and its statements regarding its long-term growth
initiatives, the increasing adoption of
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||||||
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September 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenue: | ||||||||||||||||
Licensing | $ | 191,154 | $ | 205,747 | $ | 794,563 | $ | 790,340 | ||||||||
Products | 27,628 | 30,842 | 103,388 | 131,611 | ||||||||||||
Services | 5,973 | 7,179 | 28,313 | 33,554 | ||||||||||||
Total revenue | 224,755 | 243,768 | 926,264 | 955,505 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Cost of licensing | 3,401 | 3,793 | 12,924 | 17,620 | ||||||||||||
Cost of products | 20,273 | 18,779 | 66,325 | 81,328 | ||||||||||||
Cost of services | 3,320 | 3,070 | 12,778 | 12,223 | ||||||||||||
Total cost of revenue | 26,994 | 25,642 | 92,027 | 111,171 | ||||||||||||
Gross margin | 197,761 | 218,126 | 834,237 | 844,334 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 37,958 | 33,108 | 140,143 | 123,920 | ||||||||||||
Sales and marketing | 48,707 | 37,154 | 181,736 | 149,642 | ||||||||||||
General and administrative | 39,570 | 33,039 | 149,175 | 137,633 | ||||||||||||
Restructuring charges, net | (2 | ) | 2,669 | 1,191 | 3,406 | |||||||||||
Total operating expenses | 126,233 | 105,970 | 472,245 | 414,601 | ||||||||||||
Operating income | 71,528 | 112,156 | 361,992 | 429,733 | ||||||||||||
Other income, net | 1,423 | 4,476 | 6,999 | 10,910 | ||||||||||||
Income before income taxes | 72,951 | 116,632 | 368,991 | 440,643 | ||||||||||||
Provision for income taxes | (20,906 | ) | (37,344 | ) | (103,857 | ) | (130,061 | ) | ||||||||
Net income including controlling interest | 52,045 | 79,288 | 265,134 | 310,582 | ||||||||||||
Less: net (income) / loss attributable to controlling interest | (551 | ) | (217 | ) | (832 | ) | (1,315 | ) | ||||||||
Net income attributable to |
$ | 51,494 | $ | 79,071 | $ | 264,302 | $ | 309,267 | ||||||||
Basic earnings per share | $ | 0.49 | $ | 0.72 | $ | 2.47 | $ | 2.78 | ||||||||
Diluted earnings per share | $ | 0.49 | $ | 0.71 | $ | 2.46 | $ | 2.75 | ||||||||
Weighted-average shares outstanding (basic) | 104,079 | 110,063 | 106,926 | 111,444 | ||||||||||||
Weighted-average shares outstanding (diluted) | 104,915 | 110,662 | 107,541 | 112,554 | ||||||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
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September 30, | ||||||
2012 | 2011 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 492,600 | $ | 551,512 | |||
Short-term investments | 302,693 | 391,281 | |||||
Accounts receivable, net | 43,495 | 61,815 | |||||
Inventories | 16,700 | 26,244 | |||||
Deferred taxes | 80,966 | 90,869 | |||||
Prepaid expenses and other current assets | 33,832 | 36,877 | |||||
Total current assets | 970,286 | 1,158,598 | |||||
Long-term investments | 361,614 | 272,797 | |||||
Property, plant and equipment, net | 254,676 | 117,107 | |||||
Intangible assets, net | 56,526 | 51,573 | |||||
Goodwill | 281,375 | 263,260 | |||||
Deferred taxes | 22,634 | 14,779 | |||||
Other non-current assets | 13,687 | 6,273 | |||||
Total assets | $ | 1,960,798 | $ | 1,884,387 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 130,923 | $ | 127,922 | |||
Income taxes payable | 2,424 | 4,762 | |||||
Deferred revenue | 23,493 | 26,701 | |||||
Total current liabilities | 156,840 | 159,385 | |||||
Long-term deferred revenue | 18,192 | 15,526 | |||||
Deferred taxes | 2,696 | 671 | |||||
Other non-current liabilities | 39,837 | 23,455 | |||||
Total liabilities |
217,565 |
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199,037 | ||||
Stockholders' equity: | |||||||
Class A common stock | 46 | 52 | |||||
Class B common stock | 57 | 58 | |||||
Additional paid-in capital | — |
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210,681 | ||||
Retained earnings | 1,709,479 | 1,445,189 | |||||
Accumulated other comprehensive income | 10,687 | 7,533 | |||||
Total stockholders' equity - |
1,720,269 | 1,663,513 | |||||
Controlling interest | 22,964 | 21,837 | |||||
Total stockholders' equity | 1,743,233 | 1,685,350 | |||||
Total liabilities and stockholders' equity | $ | 1,960,798 | $ | 1,884,387 | |||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||||||
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September 30, | |||||||||||||
2012 |
2011 |
2012 |
2011 | |||||||||||||
Operating activities: | ||||||||||||||||
Net income including controlling interest | $ | 52,045 | $ | 79,288 | $ | 265,134 | $ | 310,582 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 12,687 | 10,019 | 43,876 | 43,994 | ||||||||||||
Stock-based compensation expense | 13,338 | 10,749 | 47,581 | 43,665 | ||||||||||||
Amortization of premium on investments | 3,860 | 4,713 | 17,140 | 17,088 | ||||||||||||
Excess tax benefit from exercise of stock options | 89 | 6,050 | (852 | ) | (6,593 | ) | ||||||||||
Provision for doubtful accounts | (828 | ) | (56 | ) | (379 | ) | 772 | |||||||||
Deferred taxes | 8,283 | 5,211 | 1,208 | 6,784 | ||||||||||||
Loss on impairment of long-lived assets | 95 | 226 | 275 | 226 | ||||||||||||
Payment on litigation settlement | — | — | — | (3,000 | ) | |||||||||||
Other non-cash items affecting net income | 237 | 357 | 95 | 532 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | 3,472 | (22,579 | ) | 18,831 | (8,514 | ) | ||||||||||
Inventories | (2,224 | ) | (2,822 | ) | 3,051 | 2,105 | ||||||||||
Prepaid expenses and other assets | (4,690 | ) | (3,587 | ) | (4,108 | ) | (10,305 | ) | ||||||||
Accounts payable and other liabilities | (5,074 | ) | 10,837 | (6,641 | ) | (16,952 | ) | |||||||||
Income taxes, net | (2,991 | ) | (5,678 | ) | 3,866 | 708 | ||||||||||
Deferred revenue | (277 | ) | 14,400 | (498 | ) | 19,800 | ||||||||||
Other non-current liabilities | (1,223 | ) | 2,401 | 1,218 | 2,796 | |||||||||||
Net cash provided by operating activities | 76,799 | 109,529 | 389,797 | 403,688 | ||||||||||||
Investing activities: | ||||||||||||||||
Purchases of available-for-sale securities | (179,317 | ) | (164,443 | ) | (611,211 | ) | (619,238 | ) | ||||||||
Proceeds from sales of available-for-sale securities | 96,622 | 56,558 | 358,142 | 225,977 | ||||||||||||
Proceeds from maturities of available-for-sale securities | 33,620 | 27,504 | 236,535 | 203,704 | ||||||||||||
Purchases of property, plant and equipment | (117,124 | ) | (17,028 | ) | (167,349 | ) | (47,362 | ) | ||||||||
Purchases of intangible assets | — | — | (350 | ) | — | |||||||||||
Acquisitions, net of cash acquired | (11,946 | ) | — | (12,521 | ) | (3,350 | ) | |||||||||
Proceeds from sale of property, plant and equipment and assets held for sale | 1,087 | 490 | 2,075 | 3,567 | ||||||||||||
Net cash used in investing activities | (177,058 | ) | (96,919 | ) | (194,679 | ) | (236,702 | ) | ||||||||
Financing activities: | ||||||||||||||||
Payments on debt | (518 | ) | — | (518 | ) | — | ||||||||||
Proceeds from issuance of common stock | 1,061 | 685 | 17,386 | 27,918 | ||||||||||||
Repurchase of common stock | (78,244 | ) | (49,910 | ) | (268,203 | ) | (192,410 | ) | ||||||||
Excess tax benefit from the exercise of stock options | (89 | ) | (6,050 | ) | 852 | 6,593 | ||||||||||
Shares repurchased for tax withholdings on vesting of restricted stock | (326 | ) | (286 | ) | (3,835 | ) | (4,599 | ) | ||||||||
Net cash used in financing activities | (78,116 | ) | (55,561 | ) | (254,318 | ) | (162,498 | ) | ||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | 567 | (141 | ) | 288 | 1,163 | |||||||||||
Net increase / (decrease) in cash and cash equivalents | (177,808 | ) | (43,092 | ) | (58,912 | ) | 5,651 | |||||||||
Cash and cash equivalents at beginning of period | 670,408 | 594,604 | 551,512 | 545,861 | ||||||||||||
Cash and cash equivalents at end of period | $ | 492,600 | $ | 551,512 | $ | 492,600 | $ | 551,512 | ||||||||
Supplemental disclosure: | ||||||||||||||||
Cash paid for income taxes | $ | 15,312 | $ | 37,842 | $ | 98,497 | $ | 122,531 | ||||||||
Cash paid for interest | $ | 125 | $ | 133 | $ | 133 | $ | 375 | ||||||||
GAAP to Non-GAAP Reconciliations | ||||||||||||||||
(In millions, except per share data) | ||||||||||||||||
The following tables show the Company's fourth quarter of fiscal years 2011 and 2012 and fiscal year 2011 and 2012 year-to-date GAAP financial measures reconciled to Non-GAAP financial measures included in this release: | ||||||||||||||||
Net income: | Fiscal Quarter Ended | Fiscal Year Ended | ||||||||||||||
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September 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
GAAP net income | $ | 51.5 | $ | 79.1 | $ | 264.3 | $ | 309.3 | ||||||||
Stock-based compensation | 13.3 | 10.7 | 47.6 | 43.7 | ||||||||||||
Amortization of acquired intangibles | 3.1 | 2.7 | 10.8 | 15.2 | ||||||||||||
Restructuring charges, net | — | 2.7 | 1.2 | 3.4 | ||||||||||||
Income tax adjustments | (4.1 | ) | (5.3 | ) | (17.0 | ) | (31.7 | ) | ||||||||
Non-GAAP net income | $ | 63.8 | $ | 89.9 | $ | 306.9 | $ | 339.9 | ||||||||
Diluted earnings per share: | Fiscal Quarter Ended | Fiscal Year Ended | ||||||||||||||
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September 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
GAAP diluted earnings per share | $ | 0.49 | $ | 0.71 | $ | 2.46 | $ | 2.75 | ||||||||
Stock-based compensation | 0.13 | 0.10 | 0.44 | 0.39 | ||||||||||||
Amortization of acquired intangibles | 0.03 | 0.02 | 0.10 | 0.13 | ||||||||||||
Restructuring charges, net | — | 0.03 | 0.01 | 0.03 | ||||||||||||
Income tax adjustments | (0.04 | ) | (0.05 | ) | (0.16 | ) | (0.28 | ) | ||||||||
Non-GAAP diluted earnings per share | $ | 0.61 | $ | 0.81 | $ | 2.85 | $ | 3.02 | ||||||||
Shares used in computing diluted earnings per share (in millions) | 105 | 111 | 108 | 113 | ||||||||||||
The following tables show the Company's first quarter and fiscal year 2013 GAAP financial targets reconciled to Non-GAAP financial targets included in this release (numbers are approximate): | ||||||||||||||||
Gross margin: | ||||||||||||||||
Q1 2013 | ||||||||||||||||
GAAP gross margin | 90 | % | ||||||||||||||
Stock-based compensation | — | % | ||||||||||||||
Amortization of acquired intangibles | 1 | % | ||||||||||||||
Non-GAAP gross margin | 91 | % | ||||||||||||||
Operating expenses: | Q1 2013 | Fiscal Year 2013 | ||||||||||||||
GAAP operating expenses | $ | 135 | $ | 550 | ||||||||||||
Stock-based compensation | (14 | ) | (55 | ) | ||||||||||||
Amortization of acquired intangibles | (1 | ) | (5 | ) | ||||||||||||
Non-GAAP operating expenses | $ | 120 | $ | 490 | ||||||||||||
Diluted earnings per share: | Q1 2013 | |||||||||||||||
Low | High | |||||||||||||||
GAAP diluted earnings per share | $ | 0.42 | $ | 0.48 | ||||||||||||
Stock-based compensation | 0.13 | 0.13 | ||||||||||||||
Amortization of acquired intangibles | 0.03 | 0.03 | ||||||||||||||
Income tax adjustments | (0.04 | ) | (0.04 | ) | ||||||||||||
Non-GAAP diluted earnings per share | $ | 0.54 | $ | 0.60 | ||||||||||||
Shares used in computing diluted earnings per share |
104 | 104 |
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