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RealD Inc. Reports Financial Results For First Quarter Of Fiscal 2013

Stocks in this article: RLD

RealD Inc. (NYSE: RLD), a leading global licensor of 3D technologies, today announced financial results for its first quarter of fiscal 2013 ended June 22, 2012.

First Quarter Financial Highlights

Revenue

  • Revenue was $68.2 million, an increase of 14% from $59.6 million in the first quarter of fiscal 2012.
  • Net license revenue was $41.2 million, an increase of 15% from $35.7 million in the first quarter of fiscal 2012.
  • Product and other revenue was $27.0 million, an increase of 13% from $23.8 million in the first quarter of fiscal 2012.

GAAP Net Income Results

  • GAAP net income attributable to common stockholders was $3.0 million, or $0.05 per diluted share, compared to $9.6 million, or $0.17 per diluted share, for the first quarter of fiscal 2012.
  • The year-over-year decrease in GAAP net income was largely attributable to a $5.9 million decline in “Product and Other” gross profits that resulted from a significantly reduced mix of recycled 3D eyewear shipped to RealD-equipped theaters during the first quarter of fiscal 2013.
  • A higher effective tax rate of 61% in the first quarter of fiscal 2013 also contributed to the year-over-year decline in GAAP net income and net income per diluted share.

Non-GAAP Results

  • Adjusted EBITDA was $23.2 million, a decrease of 11% compared to $26.1 million in the first quarter of fiscal 2012. The decrease was largely attributable to a decrease in “Product and Other” gross profits from 3D eyewear.
  • Adjusted EBITDA decreased to 34% of net revenue from 44% of net revenue in the first quarter of fiscal 2012.
  • 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.

Balance Sheet, Cash Flows and Stock Repurchases

  • As of June 22, 2012, the Company’s balance sheet included total cash and cash equivalents of $45.5 million, an increase of $20.6 million from March 23, 2012. Total debt as of June 22, 2012 remained unchanged at $25.0 million.
  • Cash flows from operating activities were $27.8 million and total capital expenditures were $7.8 million, resulting in free cash flow of $20.0 million.
  • The Company defines free cash flow, a Non-GAAP measure, as cash flows from operating activities less total capital expenditures in a given period. Total capital expenditures include purchases of cinema systems and related components as well as purchases of property and equipment.
  • The Company repurchased 133,987 common shares during the quarter for $1.6 million, resulting in an average cost of $11.84 per share repurchased.

“The first quarter marked a solid increase in license revenue year-over-year, highlighting the continued strength of our premium cinema format on a global basis,” said Michael V. Lewis, Chairman and Chief Executive Officer of RealD. “However, our bottom-line comparison versus the prior-year quarter was impacted by a $5.9 million decline in our product gross profits that resulted from a significantly reduced mix of recycled eyewear shipped to RealD-equipped theaters during the quarter. Nonetheless, during the quarter our business generated $20 million in free cash flow, consistent with our expectation that RealD will generate strong cash flows during fiscal 2013 as our spending on capital expenditures moderates.”

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