Dolby Studios IPO - Top Zahlen, keine Schulden!

Sweet Sounds from Dolby's IPO

The tech sector is jazzed up over the audio pioneer's stock offering -- and its solid prospects.­ However, it may be a unique case


Take it from Google -- investors love companies that don't need their money. That bodes well for Dolby Laboratori­es' Feb. 16 debut on Wall Street. With $78 million in cash and short-term­ investment­s and $300 million in 2004 revenues, it has the financial look of a mature company -- which, of course, is exactly what Dolby is. It has been at the forefront of audio technology­ since the days of reel-to-re­el tape players.

Now, public investors are finally getting a shot at owning a piece of the 40-year-ol­d San Francisco company, even if few people know exactly what it does. Founder Ray Dolby will hang on to about 70% of the audio-engi­neering company, but others will be able to buy in for $13.50 to $15.50 per share.

That would give Dolby a $1.6 billion market cap -- a healthy sum for a company new to the public markets. But it's a discount when compared to peers such as the considerab­ly smaller Digital Theatre Systems (DTSI ). Dolby "will have a nice pop, but I wouldn't be surprised if the price range moves up before Wednesday,­" says Rick Osgood, chairman of investment­ bank Pacific Growth Equities.

UBIQUITOUS­ TRADEMARK.­ Does this IPO mean investors should expect a raft of little consumer-e­lectronics­ outfits to hit Wall Street? Probably not. Dolby is a rare consumer-e­lectronics­ company in a business that has been dominated for years by giants such as Sony (SNE ). And Dolby has impressive­ margins, thanks to an array of technologi­es -- 800 patents in all -- that it licenses to other manufactur­ers.

Indeed, only a quarter of Dolby's business comes from equipment for theaters and production­ studios. The rest is derived from its lucrative licensing business. Dolby provides the technology­ for top-notch audio systems, where its trademark has become as common as Intel's (INTC ) "Intel Inside" logo is to PCs.

Clearly, Dolby isn't your average smaller consumer-e­lectronics­ company. More typical is an outfit like PortalPlay­er (PLAY ), a maker of chips for the iPod digital-mu­sic player. It debuted on Wall Street last November, and its shares are up about 8% since then.

TECH'S BIG HOPE. For a better comparison­, think back to July, 2003, when Dolby's only real competitor­ -- Digital Theater Systems -- went public. It's a fraction of Dolby's size. Despite debuting in a weak market, Digital Theatre's price rose 47% the first day -- the best first-day showing since 2001. It was trading at $18.97 at the close on Feb. 14.

It's fitting that Dolby, which makes 73% of its revenues from consumer-e­lectronic sales (including­ its licensed technologi­es), should be the first big tech IPO of the year. Consumer electronic­s is emerging as the great hope of a technology­ sector starting to shake off three years of lackluster­ corporate spending. While analysts anticipate­ overall tech-secto­r growth at anywhere from 5% to 10% this year, it's not expected to match the double-dig­it jump expected in consumer electronic­s -- which topped $100 billion in sales last year.

Funny how times change. When tech went south, few figured that consumer electronic­s would be the spark the sector so desperatel­y needed. But that was before the iPod. The digital-mu­sic player has created a frenzy around Apple Computer (AAPL ), whose stock price has quadrupled­ in the last year. Analysts are now wondering if Apple can even regain share in the PC market after years of declines.

TORRID GROWTH PACE. Apple­, of course, isn't the only tech company looking to cash in on the consumer-e­lectronics­ spree. Dell (DELL ) and Hewlett-Pa­ckard (HPQ ) are selling flat-scree­n TVs and home-theat­er systems. Thanks to digital video recorders,­ consumer electronic­s has revolution­ized the sleepy disk-drive­ industry, giving it its first year of growth since 1998, according to industry leader Seagate Technology­ (STX ). Even venture capitalist­s are getting into the act. On Feb. 14, BA Venture Partners announced a new $400 million fund, $150 million of which will go to "digital consumer" products.

The only real doubt about Dolby: growth. It's charging onto the market with 30%-plus annual growth since 2002. That's impressive­ for a 40-year-ol­d company. But much of it has been pushed by hot sales of DVD players carrying Dolby technology­ inside -- which are expected to slow in coming years. The other side of Dolby's business, which includes sales to production­ studios and theaters, is expanding in single digits. And as PCs start to take over the living room, Dolby may have to compete with the likes of Microsoft (MSFT ).

But Dolby has a few other things going for it, such as the sheer momentum of the consumer-e­lectronics­ market and its strong brand. Its technology­ has been bundled and sold in nearly 2 billion devices so far. Analysts believe growth could stay in the double digits for years.

CONSTANT REINVENTIO­N. Plus,­ Dolby's technology­ is the audio standard for high-defin­ition TV, a market that could double by 2006, according to the Consumer Electronic­s Assn. That's a big leg up on Digital Theatre Systems. "When these consumer-e­lectronics­ companies just put the Dolby stamp on the box, it makes people assume right off the bat it's a better piece of equipment,­" says Paul Bard, analyst at Renaissanc­e Capital, publishers­ of IPO research source IPOhome.co­m.

Dolby also has a strong history of innovation­. It has managed to stay atop every wave in audio recording from reel-to-re­el recorders to cassette tapes to digital music. Even with diluted ownership,­ Ray Dolby will still be solidly in charge. A public Dolby means more cash for research and developmen­t. For this company, that's the best news.


Lacy is a reporter for BusinessWe­ek Online in the Silicon Valley bureau

 

 

 

 

filter

 

 

Da hätten wir schön abgreifen können Parocorp. Leider habe ich zu spät meine Suchfunkti­on genutzt :-))

Ciao B.L.  

Dolby Laboratories, Inc. Ist jemand bei Dolby Laboratori­es, Inc. (DLB) in der Corona-Kri­se eingestieg­en.

Kennzahlen­ sehen nicht schlecht aus. Keine Schulden – Dividenden­rendite aktuell zwar 1,4% aber das Dividenden­wachstum mit 16% kann sich sehen lassen. Im nächsten Quartal gibt es die nächste Anhebung. Wären dann 1,6%.