Dolby Laboratories announced its third quarter 2012 financial results.

Dolby trades on the NYSE under the symbol DLB.

For more information visit: www.dolby.com

Unedited press release follows:

Dolby Laboratories Reports Third Quarter Fiscal 2012 Results

SAN FRANCISCO — Dolby Laboratories, Inc. (NYSE:DLB) today announced the Company’s financial results for its third quarter of fiscal 2012.

For the third quarter, Dolby reported total revenue of $207.9 million, compared to $219.0 million for the third quarter of fiscal 2011.

Third quarter GAAP net income was $51.5 million, or $0.48 per diluted share, compared to $61.7 million, or $0.55 per diluted share, for the third quarter of fiscal 2011. On a non-GAAP basis, third quarter net income was $60.8 million, or $0.57 per diluted share, compared to $72.8 million, or $0.65 per diluted share, for the third quarter of fiscal 2011. Dolby’s non-GAAP measures exclude expenses related to stock-based compensation, the amortization of intangibles from business combinations, restructuring charges, and the related tax impact of these items.

“Though we are updating our outlook to reflect a challenging global economy, we continue to execute on our long-term growth initiatives,” said Kevin Yeaman, President and Chief Executive Officer, Dolby Laboratories. “In the third quarter, we continued to experience growth from our presence in the smartphone market, and we showcased our next-generation audio technology, Dolby Atmos™, to industry-wide acclaim with the highly anticipated release of Disney Pixar’s Brave.”

Financial Outlook
For fiscal 2012, Dolby is now anticipating total revenue to range from $900 million to $920 million.

GAAP
For fiscal 2012, gross margin is estimated to be approximately 90 percent, operating expenses are expected to range from $467 million to $473 million, and other income is expected to be approximately $7 million. The Company’s effective tax rate is estimated to be approximately 28 percent for fiscal 2012. Although stock-based compensation expense may vary based on factors such as stock price or volatility, total stock-based compensation expense for fiscal 2012 is anticipated to be approximately $48 million. Charges related to the amortization of acquired intangibles are expected to be approximately $11 million for the fiscal year, and restructuring charges are expected to range from approximately $1 million to $2 million in fiscal 2012.

Non-GAAP
For fiscal 2012, gross margin is estimated to be approximately 91 percent, operating expenses are expected to range from $415 million to $420 million, and other income is expected to be approximately $7 million. The Company’s effective tax rate is estimated to be approximately 28 percent for fiscal 2012. Dolby’s non-GAAP measures exclude expenses related to stock-based compensation, the amortization of intangibles from business combinations, restructuring charges, and the related tax impact of these items. In addition, the non-GAAP measures exclude a one-time benefit resulting from the release of a deferred tax liability in the first quarter of fiscal 2011.

Diluted Earnings per Share
Dolby continues to expect diluted shares outstanding of approximately 108 million. This outlook leads to a fiscal 2012 diluted earnings per share anticipated range of $2.35 to $2.43 on a GAAP basis and $2.75 to $2.83 on a non-GAAP basis.

The Company’s Conference Call Information
Members of Dolby Laboratories’ management will lead a conference call open to all interested parties to discuss the Company’s Q3 fiscal 2012 financial results at 2:00 p.m. PT (5:00 p.m. ET) on Thursday, August 2, 2012.

Access to the teleconference will be available over the Internet from http://investor.dolby.com/medialist.cfm. To access the conference by phone, callers can dial 1-888-471-3841 from within the United States or 1-719-325-2345 from outside the country.

A replay of the call will be available from 5:00 p.m. PT on Thursday, August 2, 2012, until 9:00 p.m. PT on Thursday, August 9, 2012. Callers can dial 1-877-870-5176 from within the United States or 1-858-384-5517 from outside the country, and then enter the confirmation code 2367324. An archived version of the teleconference will also be available on the Dolby Laboratories website, www.dolby.com.

Non-GAAP Financial Information
To supplement Dolby’s financial statements presented on a GAAP basis, Dolby provides non-GAAP financial measures of gross margin, operating expense, tax rate, net income, and diluted earnings per share. These measures are adjusted to exclude the charges and expenses discussed above. Dolby presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Dolby’s operating results in a manner that focuses on what Dolby’s management believes to be its ongoing business operations. Dolby’s management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes the impact of stock-based compensation expense, amortization of intangible assets acquired through business combinations, restructuring charges, the related tax impact of all of these items on the provision for income taxes, and a one-time benefit resulting from the release of a deferred tax liability in the first quarter of fiscal 2011, and the non-GAAP measures that exclude such information in order to assess the performance of Dolby’s business for planning and forecasting in subsequent periods. Dolby’s management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Whenever Dolby uses such a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed above. Investors are also encouraged to review Dolby’s GAAP financial statements as reported in its SEC filings. A reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release and on Dolby’s investor relations website at http://investor.dolby.com/medialist.cfm.

Forward-Looking Statements
Certain statements in this press release, including statements relating to Dolby’s expectations regarding revenue, gross margin, operating expense, other income, tax rate, stock-based compensation, amortization of intangibles, restructuring charges, and diluted earnings per share for fiscal 2012, and its statements regarding its long-term growth initiatives and growth from its presence in the smartphone market, as well as anticipated performance of newly released 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 the personal computer, DVD, and Blu-ray Disc™, broadcast, consumer electronics, gaming, mobile, and automobile markets; the timing of the launch date of Windows® 8; pricing pressures; risks associated with the rate at which OEMs include optical disc playback in Windows 8 devices and the rate of consumer adoption of Windows operating systems; risks that shifts from disc-based media to online media content could result in fewer devices with Dolby technologies; risks associated with the effects of macroeconomic conditions; 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 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, 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) 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 creates innovations that enrich entertainment at the movies, at home, or on the go. 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. Dolby Atmos is a trademark of Dolby Laboratories. Blu-ray Disc is a trademark of the Blu-ray Disc Association. Windows is a registered trademark of Microsoft Corporation. S12/25954 DLB-F