RealD Inc. Reports Financial Results For Fourth Quarter And Fiscal Year 2012

RealD Inc. (NYSE: RLD), a leading global licensor of 3D technologies, today announced financial results for its fourth quarter and fiscal year ended March 23, 2012.

Fourth Quarter Financial Highlights

Revenue

• Revenue was $50.0 million, a decrease of 14% from $58.5 million in the fourth quarter of fiscal 2011.
• Net license revenue was $31.7 million, a decrease of 4% from $33.1 million in the fourth quarter of fiscal 2011.
• Net license revenue for the prior-year quarter is net of $2.4 million in motion picture exhibitor stock option expense (a contra revenue item).
• Product and other revenue was $18.4 million, a decrease of 28% from $25.4 million in the fourth quarter of fiscal 2011. These results reflect an $8.1 million decrease in international product revenue that is partially attributable to a growing number of international consumers reusing RealD eyewear purchased at a previous RealD showing.

GAAP Results – Profitability Measures and Balance Sheet

• GAAP net income attributable to common stockholders was $5.5 million, or $0.10 per diluted share, compared to $4.5 million, or $0.08 per diluted share, for the fourth quarter of fiscal 2011. Results for the fourth quarter of fiscal 2012 include an income tax benefit of $2.1 million, equivalent to approximately $0.04 per diluted share.
• Gross margin increased to 54% from 51% in the fourth quarter of fiscal 2011.
• The Company’s balance sheet at March 23, 2012 included total cash and cash equivalents of $24.9 million and total debt of $25.0 million.
• Subsequent to the end of the fourth quarter of fiscal 2012, RealD entered into a new $125 million credit facility. As of May 31, 2012, unused borrowing capacity on the new credit facility was approximately $100 million.

Non-GAAP Results – Profitability Measures

• Adjusted EBITDA was $17.8 million, essentially flat compared to $17.8 million in the fourth quarter of fiscal 2011.
• Adjusted EBITDA increased to 36% of net revenue from 30% of net revenue in the fourth quarter of fiscal 2011.
• Adjusted EBITDA is defined within the section of this press release entitled “Use of Non-GAAP Financial Measures,” which includes a reconciliation to its most comparable GAAP measure, net income (loss).

“We delivered solid profitability in the fourth quarter, as healthy growth in domestic license revenue helped to offset the tough comparison we anticipated overseas versus our very strong international results in the fourth quarter of fiscal 2011,” said Michael V. Lewis, Chairman and Chief Executive Officer of RealD. “Importantly, RealD’s summer film slate is off to an excellent start in both domestic and international markets. The record-setting opening of The Avengers further demonstrates the strong consumer demand for premium presentations in RealD 3D as well as the compelling economics of 3D filmmaking for our studio and exhibitor partners.”

Key Metrics and International Revenue Statistics

• International markets generated 49% of license revenue compared to 64% of gross license revenue in the fourth quarter of fiscal 2011. The lower percentage from international license revenue reflects the difficult international comparison versus the prior-year quarter when Tangled, Chronicles of Narnia, Tron Legacy, Megamind and Gulliver’s Travels had strong results overseas. In addition, certain films released in the domestic market during the fourth quarter of fiscal 2012 were scheduled to release in key international countries after the end of the quarter.
• As of March 23, 2012, the Company had deployed approximately 20,200 RealD-enabled screens, an increase of 35% from approximately 15,000 screens as of March 25, 2011, and an increase of 500 screens, or 3%, from approximately 19,700 screens as of December 23, 2011.
• As of March 23, 2012, the Company had approximately 11,700 domestic screens at approximately 2,600 domestic theater locations and approximately 8,500 international screens at approximately 2,500 international theater locations.

$50 Million Stock Repurchase Authorization

• Subsequent to the end of the fourth quarter of fiscal 2012, the Company announced that its Board of Directors had authorized the repurchase of up to $50 million in RealD’s common stock.
• The authorization demonstrates management’s confidence in RealD’s future and its commitment to maximizing shareholder value.

Fiscal 2012 Financial Results

Revenue

• Revenue was $246.6 million, essentially flat compared to $246.1 million for fiscal 2011.
• Net license revenue was $147.8 million, an increase of 46% from $101.5 million for fiscal 2011.
• Net license revenue for fiscal 2011 is net of $36.4 million in motion picture exhibitor stock option expense (a contra revenue item).
• Product and other revenue was $98.8 million, a decrease of 32% from $144.6 million for fiscal 2011.

GAAP Results – Profitability Measures

• GAAP net income attributable to common stockholders was $36.9 million, or $0.65 per diluted share, compared to a GAAP net loss attributable to common stockholders of $12.3 million, or $0.29 per share, for fiscal 2011.
• Gross margin increased to 52% from 28% for fiscal 2011.

Non-GAAP Results – Profitability Measures

• Adjusted EBITDA was $104.4 million, an increase of 68% from $62.2 million for fiscal 2011.
• Adjusted EBITDA increased to 42% of net revenue from 25% of net revenue for fiscal 2011.

3D Theatrical Release Schedule for Fiscal 2013
(As of May 31, 2012 – Domestic)
Fiscal Q1 2013		Film		Domestic Release Date
(ending 6/22/12)		Wrath of the Titans		3/30/2012
		Titanic (re-release)		4/4/2012
		The Pirates! Band of Misfits		4/27/2012
		The Avengers		5/4/2012
		Men in Black III		5/25/2012
		Piranha 3DD		6/1/2012
		Madagascar 3: Europe’s Most Wanted		6/8/2012
		Prometheus		6/8/2012
		Brave		6/22/2012
		Abraham Lincoln: Vampire Hunter		6/22/2012
Fiscal Q2 2013		Film		Domestic Release Date
(ending 9/21/12)		Amazing Spiderman		7/3/2012
		Katy Perry: Part of Me 3D		7/5/2012
		Ice Age: Continental Drift		7/13/2012
		Step Up Revolution		7/27/2012
		Nitro Circus: The Movie		8/10/2012
		ParaNorman		8/17/2012
		Resident Evil: Retribution		9/14/2012
		Finding Nemo (re-release)		9/14/2012
		Dredd		9/21/2012
		Hotel Transylvania		9/21/2012
Fiscal Q3 2013		Film		Domestic Release Date
(ending 12/21/12)		Frankenweenie		10/5/2012
		Silent Hill: Revelation 3D		10/26/2012
		Wreck-It Ralph		11/2/2012
		Rise of the Guardians		11/21/2012
		Life of Pi		11/21/2012
		The Hobbit: An Unexpected Journey		12/14/2012
		Cirque du Soleil: Worlds Away		12/21/2012
Fiscal Q4 2013		Film		Domestic Release Date
(ending 3/22/13)		The Great Gatsby		12/25/2012
		The Texas Chainsaw Massacre 3D		1/4/2013
		Hansel and Gretel: Witch Hunters		1/11/2013
		Monsters, Inc. (re-release)		1/18/2013
		Battle of the Year: The Dream Team		1/25/2013
		47 Ronin		2/8/2013
		Escape from Planet Earth		2/14/2013
		Oz: The Great and Powerful		3/8/2013
		The Croods		3/22/2013
		Jack the Giant Killer		3/22/2013
Sources: Rentrak and imdb.com.

Conference Call Information

Members of RealD management will host a conference call to discuss the Company’s financial results for the fourth quarter and fiscal year ended March 23, 2012 beginning at 4:30 p.m. ET (1:30 p.m. PT), today, May 31, 2012. To access the call via telephone, interested parties should dial 877-941-1427 (U.S.) or 480-629-9664 (International) ten minutes prior to the start time and use conference ID 4538808.

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