Dolby Laboratories Q3 profit rises; lifts FY08 outlook

http://www.digitalcinemainfo.com/dolby_08_05_08.php
August 5, 2008
Source: Dolby

Dolby Laboratories, Inc. announced the Company's financial results for its third quarter of fiscal 2008.

For the third quarter, Dolby reported total revenue of $154.3 million, compared to $119.6 million for the third quarter of fiscal 2007, an increase of 29 percent. Third quarter net income was $46.4 million, or $0.40 per diluted share, compared to $29.7 million, or $0.26 per diluted share, for the third quarter of fiscal 2007.

Net income for the third quarter of fiscal 2008 reflects stock-based compensation expense of $5.6 million compared to $5.1 million for the third quarter of fiscal 2007. Net income for the third quarter of fiscal 2008 also reflects charges related to the amortization of intangibles of $3.0 million compared to $1.0 million for the third quarter of fiscal 2007.

"During the quarter, we experienced strong financial results while continuing to make progress in key initiatives such as PC Entertainment Experience and Dolby Mobile," said Bill Jasper, President and Chief Executive Officer, Dolby Laboratories. "Earlier this week, LG, a global technology and design leader in mobile communications, announced it would introduce high-end multimedia handsets with Dolby Mobile by the end of calendar year 2008."

Guidance

Dolby now expects fiscal 2008 revenue to be $605 million to $625 million. Net income for fiscal 2008 is now expected to be $181 million to $190 million. Earnings per diluted share is now expected to be $1.57 to $1.65. 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 fiscal 2008 to be approximately $23 million. In addition, Dolby continues to expect charges related to the amortization of intangibles for fiscal 2008 to be approximately $13 million.

Excerpts from their conference call transcript regarding DIGITAL CINEMA:

Turning to our Cinema initiative, we continue to believe the transition to digital cinema will be an opportunity for digital cinema and digital 3D products. Exhibitors are still committed to digital cinema, especially with complementary digital 3D technology helping to increase traffic and ticket prices. Yet some industry challenges still remain, including the ongoing negotiations between integrators and studios and the potential difficulty for system integrators to obtain financing in the current financial environment. It's still unclear how this will play out, but as the industry works through these challenges we believe we are well positioned to participate in the transition to digital cinema.

In addition to our Digital Cinema server, we offer a 3D solution based on reusable glasses. We believe our 3D technology provides exhibitors a higher-quality 3D experience, lower average operating cost, and a more environmentally friendly design. While we have faced significant competition in the U.S. from alternative 3D technology solutions based on a disposable glasses model, we believe the value proposition of our 3D solution is well received by a number of exhibitors worldwide. Outside North America, many exhibitors have embraced Dolby Digital 3D. We remain focused on this market and look forward to keeping you abreast of our progress.