By Staff, February 18, 2004
After 39 years as a private business, Dolby Laboratories Inc. is preparing to go public, according to BusinessWeek. Assuming all goes according to plan, the San Francisco company that made its name in noise-reduction technology for audiotape and then parlayed that expertise into theater sound systems likely will hold its initial public offering late this year.
Dolby pulled in revenues of more than $200 million in 2003 and enjoys profit margins of 20% to 40%. Revenues come from the sale of its own sound systems for theaters and from licensing fees, which average 75 cents, that Dolby collects for every consumer product shipped with its audio technology. This includes video-game consoles and DVD players
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BusinessWeek reports that growth prospects look strong for Dolby. Its technology is the U.S. standard for digital television sets, which are expected to soar, from 3.7 million units sold last year to 29 million by 2007, according to researcher In-Stat/MDR. One of the reasons Dolby has been so successful is its willingness to spend heavily on research and development.
To prepare for the IPO, Dolby is making fundamental changes, including assembling its first board of directors and installing a more elaborate financial system.
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