This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

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

Stocks in this article: RLD

About RealD Inc.

RealD is a leading global licensor of 3D technologies. RealD’s extensive intellectual property portfolio is used in applications that enable a premium 3D viewing experience in the theater, the home and elsewhere. RealD licenses its RealD Cinema Systems to motion picture exhibitors that show 3D motion pictures and alternative 3D content. RealD also provides its RealD Display, active and passive eyewear, and RealD Format technologies to consumer electronics manufacturers and content producers and distributors to enable the delivery and viewing of 3D content. RealD’s cutting-edge technologies have been used for applications such as piloting the Mars Rover.

RealD was founded in 2003 and has offices in Beverly Hills, California; Boulder, Colorado; London, United Kingdom; Shanghai, China; Hong Kong; Tokyo, Japan; and Moscow, Russia. For more information, please visit our website at www.reald.com.

© 2013 RealD Inc. All Rights Reserved.

           

RealD Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 
Three months ended Nine months ended
December 31,       December 23, December 31,       December 23,
2012 2011 2012 2011
Revenue:
License $ 30,334 $ 28,454 $ 106,499 $ 116,146
Product and other   16,605     20,572     63,604     80,435  
Total revenue 46,939 49,026 170,103 196,581
Cost of revenue:
License 10,523 9,202 34,819 30,321
Product and other   15,497     15,870     65,366     64,465  
Total cost of revenue 26,020 25,072 100,185 94,786
Gross profit 20,919 23,954 69,918 101,795
Operating expenses:
Research and development 5,376 4,336 14,866 12,736
Selling and marketing 6,053 6,564 18,872 20,259
General and administrative   12,346     11,513     35,797     29,735  
Total operating expenses   23,775     22,413     69,535     62,730  
Operating income (loss) (2,856 ) 1,541 383 39,065
Interest expense, net (426 ) (227 ) (1,027 ) (710 )
Other income (loss)   (183 )   (792 )   (557 )   157  
Income (loss) before income taxes (3,465 ) 522 (1,201 ) 38,512
Income tax expense (benefit)   694     (2,241 )   4,242     7,170  
Net income (loss) (4,159 ) 2,763 (5,443 ) 31,342

Net (income) loss attributable to noncontrolling interest

  (1 )   70     89     (9 )

Net income (loss) attributable to RealD Inc. common stockholders

$ (4,160 ) $ 2,833   $ (5,354 ) $ 31,333  
 
Earnings (loss) per common share:
Basic $ (0.08 ) $ 0.05 $ (0.10 ) $ 0.58
Diluted $ (0.08 ) $ 0.05 $ (0.10 ) $ 0.55
 
Shares used in computing earnings (loss) per common share:
Basic 51,062 54,524 53,157 54,274
Diluted 51,062 56,385 53,157 56,985
 
 
                         

RealD Inc.

Consolidated Balance Sheets

(In thousands)

 
December 31, March 23,
2012 2012
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 27,667 $ 24,894
Accounts receivable, net 50,375 59,212
Inventories 14,105 40,577
Deferred costs – eyewear 351 932
Prepaid expenses and other current assets   5,392     2,630  
Total current assets 97,890 128,245
Property and equipment, net 21,183 12,713
Cinema systems, net 129,954 141,024
Digital projectors, net-held for sale 971 1,078
Goodwill 10,657 10,657
Other intangibles, net 1,620 1,746
Deferred income taxes 3,049 3,049
Other assets   5,101     3,663  
Total assets $ 270,425   $ 302,175  
 
Liabilities and equity
Current liabilities:
Accounts payable $ 17,046 $ 22,617
Accrued expenses and other liabilities 30,570 28,870
Deferred revenue 9,218 7,201
Income taxes payable 945 1,121
Deferred income taxes   3,100     3,149  
Total current liabilities 60,879 62,958
Credit facility agreement 35,000 25,000
Deferred revenue, net of current portion 11,038 13,920
Other long-term liabilities, customer deposits and virtual print fee liability 4,458 2,691
 
Commitments and contingencies
 
Equity (deficit)
Common stock 325,540 309,894
Accumulated deficit   (165,824 )   (112,711 )
Total RealD Inc. stockholders’ equity 159,716 197,183
Noncontrolling interest   (666 )   423  
Total equity   159,050     197,606  
 
Total liabilities and equity $ 270,425   $ 302,175  
                         

RealD Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
Nine months ended
December 31, December 23,
2012 2011
Cash flows from operating activities
Net income (loss) $ (5,443 ) $ 31,342

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

24,130

20,558
Deferred income tax (49 ) (179 )
Non-cash interest expense 342 133
Non-cash stock compensation 13,965 11,718
Gain on sale of digital projectors (1,156 )
Loss on disposal of property and equipment 44 434
Impairment of long-lived assets and related purchase commitments 6,581 9,024
Changes in operating assets and liabilities:
Accounts receivable 6,361 6,661
Inventories 26,465 8,951
Prepaid expenses and other current assets (2,372 ) (306 )
Deferred costs - eyewear 581 (524 )
Other assets (661 ) (3,458 )
Accounts payable

(5,595

) (32,904 )
Accrued expenses and other liabilities (2,092 ) (12,794 )
Other long-term liabilities, customer deposits and virtual print fee liability 1,767 1,700
Income taxes receivable/payable (176 ) 4,024
Deferred revenue   (865 )   (6,269 )
Net cash provided by operating activities 62,983 36,955
 
Cash flows from investing activities
Purchases of property and equipment (11,665 ) (5,545 )
Purchases of cinema systems and related components (12,774 ) (46,656 )
Proceeds from sale of digital projectors   2,474     3,999  
Net cash used in investing activities (21,965 ) (48,202 )
 
Cash flows from financing activities
Repayments of long-term debt (2,311 )
Proceeds from credit facility 47,500 30,000
Repayments on credit facility (37,500 ) (5,000 )
Payments of debt issuance costs (1,167 )
Proceeds from exercise of stock options 1,070 528
Proceeds from employee stock purchase plan 611
Proceeds from exercise of warrants 271
Proceeds from exercise of motion picture exhibitor options 3
Purchases of treasury stock (47,759 )
Distributions to noncontrolling interests   (1,000 )    
Net cash (used) provided by financing activities   (38,245 )   23,491  
Net increase in cash and cash equivalents 2,773 12,244
Cash and cash equivalents, beginning of period   24,894     16,936  
Cash and cash equivalents, end of period $ 27,667   $ 29,180  
 
 
               

RealD Inc.

Schedule of Non-GAAP Reconciliations

(In thousands)

(Unaudited)

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 
Three months ended Nine months ended
December 31,       December 23, December 31,       December 23,
(in thousands) 2012 2011 2012 2011
 
Net income (loss) $ (4,159 ) $ 2,763 $ (5,443 ) $ 31,342
Add (deduct):
Interest expense, net 426 227 1,027 710
Income tax expense (benefit) 694 (2,241 ) 4,242 7,170
Depreciation and amortization 8,194 7,406 24,130 20,558

Other (income) loss (1)

183 792 557 (157 )

Share-based compensation expense (2)

4,871 4,086 13,965 11,718

Impairment of assets and intangibles (3)

680 1,196 6,581 9,024

Sales and use tax (4)

1,008 1,569 3,170 5,076

Property tax (5)

  580     367     1,191     1,133  
Adjusted EBITDA $ 12,477   $ 16,165   $ 49,420   $ 86,574  
 
      (1)     Includes gains and losses from foreign currency exchange and foreign currency forward contracts.
(2) Represents share-based compensation expense of nonstatutory and incentive stock options and restricted stock units and employee stock purchase plan to employees, officers and directors.
(3) Represents impairment of long-lived assets, such as fixed assets, theatrical equipment and related purchase commitments and identifiable intangibles.
(4) Represents taxes incurred by us for cinema license and product revenue.
(5) Represents property taxes on RealD Cinema Systems and digital projectors.
 
 
     

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

 
Nine months ended
December 31,                     December 23,
2012 2011
(in thousands)
Net cash provided by operating activities $ 62,983 $ 36,955
Purchases of property and equipment (11,665 ) (5,545 )
Purchases of cinema systems and related components   (12,774 )   (46,656 )
Free cash flow $ 38,544   $ (15,246 )




5 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,719.00 +33.27 0.19%
S&P 500 2,052.75 +4.03 0.20%
NASDAQ 4,701.8670 +26.1550 0.56%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs