Dolby Laboratories, Inc. (DLB)’s First Quarter 2015 Earnings Conference Call Transcript

Operator

And we’ll take our next question from Steven Frankel with Dougherty & Company.

Steven Frankel, Dougherty & Company

Good afternoon, Kevin. Let’s start with Doremi. So the weakness in the quarter is that the sign of market that’s close to saturation or perhaps just an integration / execution issues that got in the way of doing business?

Lewis Chew, Executive Vice President and Chief Financial Officer

Hey Steve. This is Lewis Chew. Yes I would say that a more minor element of that story was market driven. I would actually take that on our side that we optimistically felt like we’ve just hit the ground running at day one. And as is always the case, when you close a deal mid-quarter there is some transition time. But we feel pretty good about understanding what that was and in fact one of the things we discovered was some of the Doremi customers were ordering product just slightly in advance to the close of the deal just in case there was any logistical transition issues. And that affected the total amount of shipments we were able to make during the quarter. But yes I mean we feel very good about the Doremi product line. And we are obviously once you do a deal like this going to look at rationalizing between the product lines, the ultimate premise of the deal was that we could uniquely offer combined integrated solutions that would be very desirable to our customer base and that’s what we’re going to push forward for.

Steven Frankel, Dougherty & Company

And Kevin I know you’re loathe to do this, but maybe you could help us a little bit understand the business model for Dolby Cinema and in the US, the change is to spend a lot of money building their own brand, do you think you end up co-branding in the US if you’re successful selling in here or do you subsume your name to an RPX or an ETX?

Kevin Yeaman, President and Chief Executive Officer

So to answer the first part of your question, we see this — this will be a revenue sharing model with exhibitors. And we do think that that the experience is very compelling and it will be going to be very attractive to North American exhibitors as well as exhibitors around the world. We expect it to carry the Dolby Cinema brand and I think the extent to which how that interplays with any existing DLS brands, I think we have to — I don’t want to speculate on that.

Steven Frankel, Dougherty & Company

Thank you.