Dolby Laboratories, Inc. 10-K

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “DLB.” Our Class B common stock is neither listed nor publicly traded. As of October 23, 2020, there were 47 holders of record of our Class A common stock and 38 holders of record of our Class B common stock. The number of Class A beneficial stockholders is substantially greater than the number of holders of record since a large portion of our common stock is held through brokerage firms. Dividend Policy In October 2014, we announced a quarterly cash dividend program for our stockholders that was initiated by our Board of Directors. Since the program was initiated, a quarterly dividend has been declared and paid to all eligible stockholders of Class A and Class B common stock. Most recently, on November 12, 2020, we announced a dividend in the amount of $0.22 per share, payable on December 4, 2020, to stockholders of record as of the close of business on November 24, 2020. Dividend declarations and the establishment of future record and payment dates are subject to the Board of Directors’ continuing determination that the dividend policy is in the best interests of our stockholders. The dividend policy may be changed or canceled at the discretion of the Board of Directors at any time. See Note 9 “ Stockholders' Equity & Stock-Based Compensation ” to our consolidated financial statements for additional information related to the quarterly dividend. Further discussion of our recurring quarterly dividend is included within Shareholder Return in Item 7 " Management’s Discussion and Analysis of Financial Condition and Results of Operations ." Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers In November 2009, our Board of Directors announced a stock repurchase program ("program"), providing for the repurchase of our Class A common stock. Stock repurchases under the program may be made through open market transactions, negotiated purchases, or otherwise, at times and in amounts that we consider appropriate. The timing of repurchases and the number of shares repurchased depend upon a variety of factors, including price, regulatory requirements, the rate of dilution from our equity compensation plans, and other market conditions. The program does not have a specified expiration date, and can be limited, suspended, or terminated at our discretion at any time without prior notice. Shares repurchased under the program will be returned to the status of authorized but unissued shares of Class A common stock. The following table summarizes the initial amount of authorized repurchases as well as additional repurchases approved by our Board of Directors as of September 25, 2020 (in thousands): Authorization Period Authorization Amount Fiscal 2010: November 2009 $ 250,000 Fiscal 2010: July 2010 300,000 Fiscal 2011: July 2011 250,000 Fiscal 2012: February 2012 100,000 Fiscal 2015: October 2014 200,000 Fiscal 2017: January 2017 200,000 Fiscal 2018: July 2018 350,000 Fiscal 2019: July 2019 350,000 Total $ 2,000,000 The following table provides information regarding our share repurchases made under this program during the fourth quarter of fiscal 2020: 29 Table of Contents Repurchase Activity Total Shares Purchased Average Price Paid Per Share (1) Total Shares Purchased As Part Of Publicly Announced Programs Remaining Authorized Repurchases (2) June 27, 2020 - July 24, 2020 — $ — — $232.2 million July 25, 2020 - August 21, 2020 491,333 69.92 491,333 $197.8 million August 22, 2020 - September 25, 2020 151,363 70.27 151,363 $187.2 million Total 642,696 642,696 (1) Average price paid per share excludes commission costs. (2) Amounts represent the approximate dollar value of the maximum remaining number of shares that may yet be purchased under the stock repurchase program, and excludes commission costs. Stock Price Performance Graph The following graph compares the total cumulative return of our Class A common stock with the total cumulative return for the New York Stock Exchange Composite Index (“NYSE Composite”) and the Russell 3000 Index (“Russell 3000”) for the five fiscal years ended September 25, 2020. The figures represented below assume an investment of $100 in our Class A common stock at the closing price of $31.40 on September 25, 2015, and in the NYSE Composite and Russell 3000 on the same date and the reinvestment of dividends into shares of common stock. The comparisons in the table are required by the Securities and Exchange Commission and are not intended to forecast or be indicative of possible future performance of our Class A common stock. This graph shall not be deemed “filed” for purposes of Section 18 of Securities Exchange Act of 1934, as amended (“Exchange Act”) or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act. 30 Table of Contents ITEM 6. SELECTED FINANCIAL DATA The following selected consolidated financial data should be read in conjunction with Part II, Item 7, “ Management's Discussion and Analysis of Financial Condition and Results of Operations ,” and our audited consolidated financial statements and the accompanying notes included within this filing. The consolidated balance sheet data for the fiscal years ended September 25, 2020 and September 27, 2019, and consolidated statements of operations data for the fiscal years ended September 25, 2020, September 27, 2019, and September 28, 2018 were derived from our audited consolidated financial statements included in this report. The consolidated balance sheet data as of September 28, 2018, September 29, 2017, and September 30, 2016 and consolidated statements of operations data for the fiscal years ended September 29, 2017 and September 30, 2016 were derived from our audited consolidated financial statements not included in this report. The historical financial results presented below are not necessarily indicative of results to be achieved in future periods. Note that fiscal 2016 consisted of 53 weeks, while all other fiscal years presented consisted of 52 weeks. All amounts presented below are displayed in thousands, except per share amounts. Fiscal Year Ended September 25, 2020 September 27, 2019 September 28, 2018 September 29, 2017 September 30, 2016 (1) Operations: Revenue $ 1,161,792 $ 1,241,620 $ 1,054,600 $ 1,080,177 $ 1,025,738 Gross margin 1,015,294 1,080,766 927,038 961,648 916,756 Operating expenses 796,552 823,689 743,533 714,515 684,961 Income before provision for income taxes 239,715 282,307 196,374 255,145 235,904 Net income attributable to Dolby Laboratories, Inc. 231,363 255,151 41,746 206,481 185,860 Net Income Per Share: Basic $ 2.30 $ 2.51 $ 0.40 $ 2.03 $ 1.85 Diluted $ 2.25 $ 2.44 $ 0.39 $ 2.00 $ 1.81 Weighted-Average Shares Outstanding: Basic 100,564 101,629 103,377 101,784 100,717 Diluted 102,944 104,572 106,978 103,286 102,424 Cash dividends declared per common share $ 0.88 $ 0.79 $ 0.67 $ 0.58 $ 0.50 Cash dividend paid per common share $ 0.88 $ 0.76 $ 0.64 $ 0.56 $ 0.48 Fiscal Year Ended September 25, 2020 September 27, 2019 September 28, 2018 September 29, 2017 September 30, 2016 (1) Cash and cash equivalents $ 1,071,876 $ 797,210 $ 918,063 $ 627,017 $ 516,112 Working capital 1,280,087 1,074,687 1,211,378 1,061,218 546,647 Short-term and long-term investments 99,097 298,733 365,920 562,121 515,533 Total assets 2,917,325 2,821,749 2,865,387 2,836,463 2,310,106 Total stockholders’ equity—Dolby Laboratories, Inc. 2,432,643 2,307,351 2,363,936 2,391,627 1,970,256 (1) The selected financial data for fiscal year ended September 30, 2016 presented in the table above reflects ASC 605, and has not been recast for, and does not reflect the adoption of ASC 606. 31 Table of Contents