Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | 28-May-14 | Sep. 30, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'RealD Inc. | ' | ' |
Entity Central Index Key | '0001327471 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--03-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $344,019,998 |
Entity Common Stock, Shares Outstanding | ' | 49,527,066 | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Consolidated_balance_sheets
Consolidated balance sheets (USD $) | Mar. 31, 2014 | Mar. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $28,800 | $31,020 |
Accounts receivable, net | 48,422 | 45,472 |
Inventories | 9,109 | 15,430 |
Deferred costs - eyewear | 149 | 538 |
Prepaid expenses and other current assets | 5,197 | 3,973 |
Total current assets | 91,677 | 96,433 |
Property and equipment, net | 22,491 | 25,002 |
Cinema systems, net | 106,735 | 125,379 |
Digital projectors, net-held for sale | 57 | 728 |
Goodwill | 10,657 | 10,657 |
Other intangibles, net | 6,154 | 7,417 |
Deferred income taxes | 4,571 | 3,001 |
Other assets | 4,840 | 5,031 |
Total assets | 247,182 | 273,648 |
Current liabilities: | ' | ' |
Accounts payable | 12,470 | 22,737 |
Accrued expenses and other liabilities | 21,896 | 25,013 |
Deferred revenue | 8,143 | 9,916 |
Income taxes payable | 1,790 | 603 |
Deferred income taxes | 4,288 | 2,860 |
Current portion of Credit Agreement | 12,500 | 1,042 |
Total current liabilities | 61,087 | 62,171 |
Credit Agreement, net of current portion | 23,750 | 46,458 |
Deferred revenue, net of current portion | 6,465 | 10,392 |
Other long-term liabilities, customer deposits and virtual print fee liability | 5,046 | 5,438 |
Total liabilities | 96,348 | 124,459 |
Commitments and contingencies | ' | ' |
Equity (deficit) | ' | ' |
Common stock, $0.0001 par value, 200,000 shares authorized; 49,438 and 49,365 shares issued and outstanding at March 31, 2014 and March 31, 2013, respectively | 352,913 | 332,694 |
Accumulated deficit | -201,763 | -182,846 |
Accumulated other comprehensive income | 262 | 115 |
Total RealD Inc. stockholders' equity | 151,412 | 149,963 |
Noncontrolling interest | -578 | -774 |
Total equity | 150,834 | 149,189 |
Total liabilities and equity | $247,182 | $273,648 |
Consolidated_balance_sheets_Pa
Consolidated balance sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Consolidated balance sheets | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 49,438 | 49,365 |
Common stock, shares outstanding | 49,438 | 49,365 |
Consolidated_statements_of_ope
Consolidated statements of operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Revenue: | ' | ' | ' |
License | $132,512 | $137,752 | $147,801 |
Product and other | 66,722 | 77,800 | 98,827 |
Total revenue | 199,234 | 215,552 | 246,628 |
Cost of revenue: | ' | ' | ' |
License | 45,364 | 47,243 | 39,801 |
Product and other | 58,611 | 78,117 | 78,137 |
Total cost of revenue | 103,975 | 125,360 | 117,938 |
Gross profit | 95,259 | 90,192 | 128,690 |
Operating expenses: | ' | ' | ' |
Research and development | 19,685 | 19,454 | 16,500 |
Selling and marketing | 27,137 | 25,266 | 27,682 |
General and administrative | 50,596 | 47,830 | 42,189 |
Total operating expenses | 97,418 | 92,550 | 86,371 |
Operating income (loss) | -2,159 | -2,358 | 42,319 |
Interest expense, net | -2,255 | -1,483 | -971 |
Other income (loss) | -679 | -982 | 782 |
Income (loss) before income taxes | -5,093 | -4,823 | 42,130 |
Income tax expense | 6,117 | 5,064 | 5,105 |
Net income (loss) | -11,210 | -9,887 | 37,025 |
Net (income) loss attributable to noncontrolling interest | -196 | 197 | -156 |
Net income (loss) attributable to RealD Inc. common stockholders | ($11,406) | ($9,690) | $36,869 |
Earnings (loss) per common share: | ' | ' | ' |
Basic (in dollars per share) | ($0.23) | ($0.19) | $0.68 |
Diluted (in dollars per share) | ($0.23) | ($0.19) | $0.65 |
Shares used in computing earnings per common share: | ' | ' | ' |
Basic (in shares) | 49,504 | 52,345 | 54,352 |
Diluted (in shares) | 49,504 | 52,345 | 56,852 |
Consolidated_statements_of_com
Consolidated statements of comprehensive income (loss) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Consolidated statements of comprehensive income (loss) | ' | ' | ' |
Net income (loss) | ($11,210) | ($9,887) | $37,025 |
Other Comprehensive income (loss), net of reclassification adjustments and taxes: | ' | ' | ' |
Foreign currency translation gains | 147 | 115 | ' |
Other comprehensive income, net of tax | 147 | 115 | ' |
Comprehensive income (loss) | ($11,063) | ($9,772) | $37,025 |
Consolidated_statements_of_cha
Consolidated statements of changes in equity (deficit) (USD $) | Total | Common stock | Accumulated other comprehensive loss | Accumulated deficit | Noncontrolling interest |
Balance at Mar. 25, 2011 | $145,100,000 | $292,904,000 | ' | ($149,580,000) | $1,776,000 |
Balance (in shares) at Mar. 25, 2011 | ' | 53,569,531 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Share-based compensation | 15,744,000 | 15,744,000 | ' | ' | ' |
Exercise of stock options | 972,000 | 972,000 | ' | ' | ' |
Exercise of stock options (in shares) | ' | 257,354 | ' | ' | ' |
Exercise of motion picture exhibitor options | 3,000 | 3,000 | ' | ' | ' |
Exercise of motion picture exhibitor options (in shares) | ' | 407,593 | ' | ' | ' |
Exercise of warrants | 271,000 | 271,000 | ' | ' | ' |
Exercise of warrants (in shares) | ' | 326,700 | ' | ' | ' |
Noncontrolling interest distribution | -1,509,000 | ' | ' | ' | -1,509,000 |
Net income (loss) | 37,025,000 | ' | ' | 36,869,000 | 156,000 |
Balance at Mar. 23, 2012 | 197,606,000 | 309,894,000 | ' | -112,711,000 | 423,000 |
Balance (in shares) at Mar. 23, 2012 | ' | 54,561,178 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Share-based compensation | 18,474,000 | 18,474,000 | ' | ' | ' |
Exercise of stock options | 3,516,000 | 3,516,000 | ' | ' | ' |
Exercise of stock options (in shares) | ' | 543,797 | ' | ' | ' |
Issuance of common stock in connection with restricted stock units (in shares) | ' | 80,781 | ' | ' | ' |
Purchase and distribution of stock under employee stock purchase plan | 810,000 | 810,000 | ' | ' | ' |
Purchase and distribution of stock under employee stock purchase plan (in shares) | ' | 107,108 | ' | ' | ' |
Repurchases of common stock | -60,445,000 | ' | ' | -60,445,000 | ' |
Repurchases of common stock (in shares) | -5,927,729 | -5,927,729 | ' | ' | ' |
Other comprehensive loss, net of tax | 115,000 | ' | 115,000 | ' | ' |
Noncontrolling interest distribution | -1,000,000 | ' | ' | ' | -1,000,000 |
Net income (loss) | -9,887,000 | ' | ' | -9,690,000 | -197,000 |
Balance at Mar. 31, 2013 | 149,189,000 | 332,694,000 | 115,000 | -182,846,000 | -774,000 |
Balance (in shares) at Mar. 31, 2013 | ' | 49,365,135 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Share-based compensation | 17,741,000 | 17,741,000 | ' | ' | ' |
Exercise of stock options | 2,003,000 | 2,003,000 | ' | ' | ' |
Exercise of stock options (in shares) | ' | 614,448 | ' | ' | ' |
Issuance of common stock in connection with restricted stock units (in shares) | ' | 50,058 | ' | ' | ' |
Purchase and distribution of stock under employee stock purchase plan | 475,000 | 475,000 | ' | ' | ' |
Purchase and distribution of stock under employee stock purchase plan (in shares) | ' | 79,856 | ' | ' | ' |
Repurchases of common stock | -7,511,000 | ' | ' | -7,511,000 | ' |
Repurchases of common stock (in shares) | -671,997 | -671,997 | ' | ' | ' |
Other comprehensive loss, net of tax | 147,000 | ' | 147,000 | ' | ' |
Net income (loss) | -11,210,000 | ' | ' | -11,406,000 | 196,000 |
Balance at Mar. 31, 2014 | $150,834,000 | $352,913,000 | $262,000 | ($201,763,000) | ($578,000) |
Balance (in shares) at Mar. 31, 2014 | ' | 49,437,500 | ' | ' | ' |
Consolidated_statements_of_cas
Consolidated statements of cash flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Cash flows from operating activities | ' | ' | ' |
Net income (loss) | ($11,210) | ($9,887) | $37,025 |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 40,300 | 33,131 | 28,266 |
Deferred income tax | -142 | -241 | 38 |
Non-cash interest expense | 529 | 483 | 151 |
Non-cash stock compensation | 17,741 | 18,474 | 15,744 |
(Gain) Loss on disposal of property and equipment | 307 | 44 | -1,290 |
Impairment of long-lived assets | 4,522 | 8,679 | 10,269 |
Changes in operating assets and liabilities: | ' | ' | ' |
Accounts receivable | -2,950 | 11,266 | -6,062 |
Inventories | 6,321 | 25,147 | 14,394 |
Prepaid expenses and other current assets | -1,611 | -954 | -896 |
Deferred costs - eyewear | 389 | 394 | -883 |
Other assets | 191 | -590 | -1,528 |
Accounts payable | -10,308 | 125 | -36,916 |
Accrued expenses and other liabilities | -3,646 | -7,790 | -11,399 |
Other long-term liabilities, customer deposits and virtual print fee liability | -610 | 2,747 | 1,989 |
Income taxes receivable/payable | 1,574 | -518 | 1,260 |
Deferred revenue | -5,697 | -813 | -7,161 |
Net cash provided by operating activities | 35,700 | 79,697 | 43,001 |
Cash flows from investing activities | ' | ' | ' |
Purchases of property and equipment | -4,285 | -16,169 | -8,760 |
Purchases of cinema systems and related components | -18,050 | -18,121 | -52,708 |
Purchases of intangible assets | ' | -6,084 | ' |
Proceeds from sale of fixed assets | 551 | 2,474 | 3,999 |
Net cash used in investing activities | -21,784 | -37,900 | -57,469 |
Cash flows from financing activities | ' | ' | ' |
Noncontrolling interest distribution | ' | -1,000 | -1,509 |
Payments of debt issuance costs | ' | -1,167 | ' |
Repayments of long-term debt | ' | ' | -2,311 |
Proceeds from credit facility | 37,500 | 60,000 | 30,000 |
Repayments on credit facility | -48,750 | -37,500 | -5,000 |
Proceeds from exercise of stock options | 2,003 | 3,516 | 972 |
Proceeds from issuance of common stock pursuant to employee stock purchase plan | 475 | 810 | ' |
Proceeds from exercise of warrants | ' | ' | 271 |
Proceeds from exercise of motion picture exhibitor options | ' | ' | 3 |
Purchases of treasury stock | -7,511 | -60,445 | ' |
Net cash provided (used) by financing activities | -16,283 | -35,786 | 22,426 |
Effect of currency exchange rate changes on cash and cash equivalents | 147 | 115 | ' |
Net increase (decrease) in cash and cash equivalents | -2,220 | 6,126 | 7,958 |
Cash and cash equivalents, beginning of year | 31,020 | 24,894 | 16,936 |
Cash and cash equivalents, end of year | 28,800 | 31,020 | 24,894 |
Supplemental disclosures of cash flow information | ' | ' | ' |
Cash payments for income taxes | 872 | 1,967 | 1,060 |
Cash payments for interest expense | 1,726 | 1,000 | 820 |
Accounts receivable for sale of digital projectors | ' | ' | $2,474 |
Business_and_basis_of_presenta
Business and basis of presentation | 12 Months Ended |
Mar. 31, 2014 | |
Business and basis of presentation | ' |
Business and basis of presentation | ' |
1. Business and basis of presentation | |
RealD Inc., including its subsidiaries ("RealD"), is a leading global licensor of 3D and other visual technologies. | |
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The consolidated financial statements include the accounts of RealD, its wholly owned subsidiaries and its majority owned subsidiaries. We do not have any interests in variable interest entities. For consolidated subsidiaries that are not wholly owned but are majority owned, the subsidiaries' assets, liabilities, and operating results are included in their entirety in the accompanying consolidated financial statements. The noncontrolling interests in those assets, liabilities, and operations are reflected as non-controlling interests in the consolidated balance sheets under equity (deficit) and consolidated statements of operations. | |
All significant intercompany balances and transactions have been eliminated in consolidation. | |
Summary_of_significant_account
Summary of significant accounting policies | 12 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Summary of significant accounting policies | ' | ||||||||||
Summary of significant accounting policies | ' | ||||||||||
2. Summary of significant accounting policies | |||||||||||
Accounting period | |||||||||||
On November 14, 2012, our Board of Directors approved a change in our accounting periods from the previous configuration of four 13-week periods for a total of 52 weeks to a calendar month end and calendar quarter end accounting period. This change in accounting period commenced in the third quarter ended December 31, 2012 of fiscal year 2013. As a result, the year ended March 31, 2014 is eight days shorter (2.1%) than the year ended March 31, 2013 and one day (0.0%) longer than the year ended March 23, 2012. | |||||||||||
Use of estimates | |||||||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. | |||||||||||
Earnings (loss) per share of common stock | |||||||||||
Basic income per share of common stock is computed by dividing the net income (loss) attributable to RealD common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing net income (loss) attributable to RealD Inc. common stockholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, shares to be purchased under our employee stock purchase plan and unvested restricted stock units. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. | |||||||||||
The calculation of the basic and diluted earnings (loss) per share of common stock for the years ended March 31, 2014, March 31, 2013 and March 23, 2012 was as follows: | |||||||||||
Year ended | |||||||||||
(in thousands, except per share data) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (11,210 | ) | $ | (9,887 | ) | $ | 37,025 | |||
Net (income) loss attributable to noncontrolling interest | (196 | ) | 197 | (156 | ) | ||||||
| | | | | | | | | | | |
Net income (loss) attributable to RealD Inc. common stockholders | $ | (11,406 | ) | $ | (9,690 | ) | $ | 36,869 | |||
Denominator: | |||||||||||
Weighted-average common shares outstanding (basic) | 49,504 | 52,345 | 54,352 | ||||||||
Effect of dilutive securities | — | — | 2,500 | ||||||||
| | | | | | | | | | | |
Weighted-average common shares outstanding (diluted) | 49,504 | 52,345 | 56,852 | ||||||||
Earnings (loss) per common share: | |||||||||||
Basic | $ | (0.23 | ) | $ | (0.19 | ) | $ | 0.68 | |||
Diluted | $ | (0.23 | ) | $ | (0.19 | ) | $ | 0.65 | |||
Due to the loss attributable to RealD Inc. common stockholders in the years ended March 31, 2014 and March 31, 2013, basic earnings (loss) per common share and diluted earnings (loss) per common share are the same as the effect of potentially dilutive securities would be anti-dilutive. | |||||||||||
The weighted-average number of anti-dilutive shares excluded from the calculation of diluted earnings (loss) per common share for the years ended March 31, 2014, March 31, 2013 and March 23, 2012 was as follows: | |||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
Options and warrants to purchase common stock | 9,299 | 8,441 | 3,899 | ||||||||
Conversion of convertible preferred stock | — | — | — | ||||||||
| | | | | | | | | | | |
Total | 9,299 | 8,441 | 3,899 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Fair value measurements | |||||||||||
Accounting Standards Codification Topic (ASC) 820-10, Fair Value Accounting (ASC 820), provides a common definition of fair value and establishes a framework to make the measurement of fair value in U.S. GAAP more consistent and comparable. This guidance also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value be classified and disclosed in the following three categories: | |||||||||||
• | |||||||||||
Level 1—Quoted prices for identical instruments in active markets. | |||||||||||
• | |||||||||||
Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. | |||||||||||
• | |||||||||||
Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |||||||||||
Our financial assets and liabilities, which include financial instruments as defined by ASC 820, include cash and cash equivalents, accounts receivable, accounts payable, long-term debt and derivatives. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable are a reasonable approximation of fair value due to the short maturities of these instruments. The carrying amount of long-term debt approximates fair value based on borrowing rates currently available to us. The carrying amount of our derivative instruments is recorded at fair value and is determined based on observable inputs that are corroborated by market data (Level 2). | |||||||||||
As of March 31, 2014 and March 31, 2013, the fair values of our derivative instruments that were carried at fair value on a recurring basis were not significant. | |||||||||||
Derivative instruments | |||||||||||
Our derivative instruments are recorded at fair value in other current assets or other current liabilities, respectively, in the consolidated balance sheets. Changes in fair value are reported as a component of other income or loss on our consolidated statements of operations. For all periods presented, none of our derivative instruments were designated as hedging instruments. We do not use foreign currency option or foreign exchange forward contracts for speculative or trading purposes. | |||||||||||
We purchase foreign currency forward contracts, generally with maturities of six months or less, to reduce the volatility of cash flows primarily related to forecasted payments and expenses denominated in certain foreign currencies. We had outstanding forward contracts based in British pound sterling and Euro with notional amounts totaling $0.4 million as of March 31, 2014. We had outstanding forward contracts based in British pound sterling, Euro and Canadian dollar with notional amounts totaling $5.8 million as of March 31, 2013. As of March 31, 2014 and March 31, 2013, the carrying amount of our foreign currency forward contracts was not significant and was classified as Level 2 fair value instruments, which was determined based on observable inputs that were corroborated by market data. For all periods presented, the net realized and unrealized gains and losses related to forward contracts were not significant. | |||||||||||
Marketable securities | |||||||||||
We classify unrealized gains and losses on marketable securities reported as a component of accumulated other comprehensive income. As of March 31, 2014, March 31, 2013 and March 23, 2012, we had no marketable securities. | |||||||||||
The objectives of our investment policy are to preserve capital, provide sufficient liquidity to satisfy operating and investment purposes, and capture a market rate of return based on our investment policy parameters and market conditions. Our investment policy limits investments to certain types of debt and money market instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer. | |||||||||||
Cash equivalents | |||||||||||
We consider cash equivalents to be only those investments that are highly liquid, readily convertible into cash and which mature within three months from the date of purchase. | |||||||||||
Accounts receivable | |||||||||||
Accounts receivable consist of trade receivables, VAT receivable and other receivables. We extend credit to our customers, who are primarily in the movie production and exhibition businesses. We provide for the estimated accounts receivable that will not be collected. These estimates are based on an analysis of historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customers' payment terms and their economic condition. Collection of accounts receivable may be affected by changes in economic or other industry conditions and may, accordingly, impact our overall credit risk. The allowance for doubtful accounts and customer credits totaled $3.2 million and $2.6 million as of March 31, 2014 and March 31, 2013, respectively. | |||||||||||
Inventories and deferred costs-eyewear | |||||||||||
Inventories and deferred costs-eyewear represent eyewear and are substantially all finished goods. Inventories and deferred costs-eyewear are valued at the lower of cost (first-in, first-out method) or market value. At each balance sheet date, we evaluate ending inventories and deferred costs-eyewear for net realizable value. We also evaluate inventories for excess quantities and obsolescence. These evaluations include analyses of expected future average selling prices, projections of future demand and technology changes. In order to state inventories at the lower of cost or market, we maintain reserves against such inventories. If our analyses indicate that market is lower than cost, a write-down of inventories is recorded in cost of revenue in the period the loss is identified. As of March 31, 2014 and March 31, 2013, the inventory reserve as a result of our net realizable value analyses was $0.6 million and $0.4 million, respectively. | |||||||||||
Domestically, we provide our RealD eyewear free of charge to motion picture exhibitors and then receive a fee from the motion picture studios for the usage of that RealD eyewear by the motion picture exhibitors' consumers. | |||||||||||
For RealD eyewear located at a motion picture exhibitor, we do not believe that it is operationally practical to perform physical counts or request the motion picture exhibitor to perform physical counts and confirm quantities held to ensure that losses due to damage, destruction, and shrinkage are specifically recognized in the period incurred due to the number of domestic RealD-enabled screens and the related usage of RealD eyewear. We believe that the cost to monitor shrinkage or usage significantly outweighs the financial reporting benefits of using a specific identification methodology of expensing. We believe that utilizing a composite method of expensing RealD eyewear inventory costs provides a rational and reasonable approach to ensuring that shrinkage is provided for in the period incurred and that inventory costs are expensed in the periods that reasonably reflect the periods in which the related revenue is recognized. In doing so, we believe the following methodology reasonably and generally reflects periodic income or loss under these facts and circumstances: | |||||||||||
• | |||||||||||
For an estimated period of time following shipment to domestic motion picture exhibitors, no expense is recognized from the time of shipment until the delivery is made because eyewear is in transit and unused. | |||||||||||
• | |||||||||||
The inventory cost is expensed on a straight-line basis over an estimated usage period beginning with initial usage of the eyewear shipped. In estimating the expensing start date and related expense period, we consider various factors including, but not limited to, those relating to a 3D motion picture's opening release date, a 3D motion picture's expected release period, the number of currently playing 3D motion pictures and the motion picture exhibitor's buying and stocking patterns and practices. | |||||||||||
We believe that the expensing methodology described above rationally and reasonably approximates the period the related usage occurs resulting in our RealD eyewear product revenue. The expensing start date following the date of shipment is meant to approximate the date at which usage begins. Additionally, as the expense recognition period has been and is expected to continue to be short, we believe it adequately recognizes inventory impairments due to loss and damage on a timely basis. We further believe that exposures due to loss or damage, if any, are considered normal shrinkage and a necessary and expected cost to generate the revenue per 3D motion picture earned through RealD eyewear usage. We continue to monitor the reasonableness of this methodology to ensure that it approximates the period over which the related RealD eyewear product revenue is earned and realizable. Costs of RealD eyewear inventory that have shipped but have not yet been expensed per this methodology are reported as deferred costs-eyewear. | |||||||||||
Property and equipment, RealD Cinema Systems and digital projectors | |||||||||||
Property and equipment, RealD Cinema Systems and digital projectors are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. The major categories and related estimated useful lives are as follows: | |||||||||||
RealD Cinema Systems | 5 - 8 years | ||||||||||
Digital projectors—held for sale | 10 years | ||||||||||
Leasehold improvements | Shorter of useful life or lease | ||||||||||
Machinery and equipment | 2 - 7 years | ||||||||||
Furniture and fixtures | 3 - 5 years | ||||||||||
Computer equipment and software | 3 - 5 years | ||||||||||
Digital projectors—held for sale (digital projectors) also include digital servers, lenses and accessories. Upon installation at the customer location, we retain title to the RealD Cinema Systems which are held and used by our customers. The digital projectors are held for sale at either a specified date or upon occurrence of certain contingent events. Depreciation for RealD Cinema Systems and digital projectors is included in cost of revenue. | |||||||||||
We receive virtual print fees (VPFs) from third-party motion picture studios. VPFs represent amounts from third-party motion picture studios that are paid to us when a motion picture is played on one of our digital projectors. VPFs are deferred and deducted from the selling price of the digital projector. VPFs are recorded as a liability on the accompanying consolidated balance sheets and totaled $0.1 million and $0.3 million as of March 31, 2014 and March 31, 2013, respectively. | |||||||||||
Major enhancements and improvements are capitalized. Maintenance and repairs for cinema systems and digital projectors are charged to expense as incurred. Maintenance and repairs expense totaled $0.5 million, $0.9 million and $0.7 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | |||||||||||
Intangibles | |||||||||||
Intangibles are deemed to have finite lives and consist of acquired developed technologies (which are primarily patents) and are amortized over their estimated useful lives of 5 to 19 years (with a weighted average remaining amortization period of 5.8 years) using the straight-line method. | |||||||||||
Impairment of long-lived assets | |||||||||||
We review long-lived assets, such as property and equipment, cinema systems, digital projectors and intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Factors or circumstances that could indicate the occurrence of such events include current period operating or cash flow losses combined with a history of operating or cash flow losses, a projection or forecast that demonstrates continuing operating or cash flow losses, or incurring costs in excess of amounts originally expected to acquire or construct an asset. If the asset is not recoverable, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. | |||||||||||
During the year ended March 31, 2014, the impairment charged to cost of revenue for all impaired RealD Cinema Systems totaled $4.5 million. | |||||||||||
During the year ended March 31, 2013, we determined that a non-cancelable purchase commitment for certain cinema systems configurations in the aggregate amount of $3.5 million were not fully recoverable, primarily due to the initial investment costs which are expected to exceed the anticipated future cash flows for the related cinema systems. The impairment charged during the year ended March 31, 2013 for all impaired RealD Cinema Systems charged to cost of revenue was $8.0 million of the total $8.7 million impairment expense. | |||||||||||
During the year ended March 23, 2012, we determined that certain of our cinema systems were not recoverable and that the carrying value of the assets exceeded fair value, primarily due to the number of certain of our cinema system assets on hand, including related outstanding purchase commitments and the continuing shift in the mix in the deployment of cinema systems based on the type of digital projectors installed and theater configuration. The fair value was primarily determined by evaluating the discounted future cash flows expected to be generated from the cinema systems. The impairment charged during the year ended March 23, 2012 to cost of revenue for certain of the cinema systems totaled $10.3 million. | |||||||||||
Goodwill | |||||||||||
Goodwill is deemed to have an indefinite useful life and therefore is not amortized. We evaluate our goodwill for impairment using a two-step process that is performed at least annually during our fourth fiscal quarter, or whenever events or circumstances indicate that goodwill may be impaired. The first step is a comparison of the fair value of an internal reporting unit with its carrying amount, including goodwill. A reporting unit is an operating segment or one level below an operating segment. If the fair value of the reporting unit exceeds its carrying value, goodwill of the reporting unit is not considered impaired and the second step is unnecessary. If the carrying value of the reporting unit exceeds its fair value, the second step is performed to measure the amount of impairment by comparing the carrying amount of the goodwill to a determination of the implied value of the goodwill. If the carrying amount of goodwill is greater than the implied value, an impairment loss is recognized for the difference. We currently have one reporting unit in which goodwill resides and the reporting unit did not fail step one. | |||||||||||
Revenue recognition and revenue reductions | |||||||||||
We derive substantially all of our revenue from the license of our RealD Cinema Systems and the product sale of our RealD eyewear. We evaluate revenue recognition for transactions using the criteria set forth by the SEC in Staff Accounting Bulletin No. 104, Revenue Recognition (SAB 104) and Accounting Standards Codification Topic 605, Revenue Recognition (ASC 605). The revenue recognition guidance states that revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller's price to the buyer is fixed or determinable and collectability is reasonably assured. We record revenue net of estimated allowances. | |||||||||||
License revenue | |||||||||||
License revenue is accounted for as an operating lease. License revenue is primarily derived under per-admission, periodic fixed fee, or per-motion picture basis with motion picture exhibitors. Amounts received up front, less estimated allowances, are deferred and recognized over the lease term using the straight-line method. Additional lease payments that are contingent upon future events outside our control, including those related to admission and usage, are recognized as revenues when the contingency is resolved and we have no more obligations to our customers specific to the contingent payment received. Certain of our license revenue from leasing our RealD Cinema Systems is earned upon admission by the motion picture exhibitor's consumers. We estimate and record licensing revenue related to motion picture exhibitor consumer admissions in the quarter in which the admission occurs, but only when reasonable estimates of such amounts can be made. We determine that there is persuasive evidence of an arrangement upon the execution of a license agreement or upon the receipt of a licensee's admissions report. Revenue is deemed fixed or determinable upon receipt of a licensee's admissions report or evidence of a RealD box office showing by licensee. We determine collectability based on an evaluation of the licensee's recent payment history. | |||||||||||
Product revenue | |||||||||||
We recognize product revenue, net of allowances, when title and risk of loss have passed and when there is persuasive evidence of an arrangement, the payment is fixed or determinable, and collectability of payment is reasonably assured. In the United States and Canada, certain of our product revenue from the sale of our RealD eyewear is earned upon admission and usage by the motion picture exhibitor's consumers. Our customers, however, do not report admission or usage information until after the admission and usage has occurred, and such information may be received subsequent to our fiscal period end. We estimate and record such product revenue in the period in which the admission and usage occurs, but only when reasonable estimates of such amounts can be made. | |||||||||||
Cost of revenue | |||||||||||
Cost of revenue principally consists of depreciation expense of our RealD Cinema Systems deployed at a motion picture exhibitor's premises, digital projector depreciation expenses, RealD eyewear costs (including shipping, handling and recycling costs), field service and support costs and occupancy costs. | |||||||||||
Shipping and handling costs | |||||||||||
Amounts billed to customers for shipping and handling costs are included in revenue. Shipping and handling costs that we incur consist primarily of packaging and transportation charges and are recorded in cost of revenue. Shipping and handling costs recognized in cost of revenue were $6.6 million, $7.9 million and $6.8 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | |||||||||||
Research and development costs | |||||||||||
Research and development costs are expensed as incurred and are primarily comprised of personnel costs related to our research and development staff, depreciation and amortization of research and development assets, prototype and materials costs, the cost of third-party service providers supporting our research and development efforts and occupancy costs. | |||||||||||
Selling and marketing costs | |||||||||||
Selling and marketing costs are primarily comprised of personnel costs related to our selling and marketing staff, advertising costs, including promotional events and other brand building and product marketing expenses, corporate communications, certain professional fees, occupancy costs and travel expenses. | |||||||||||
Advertising costs are expensed as incurred. Advertising expenses were approximately $2.7 million, $3.7 million and $5.3 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | |||||||||||
General and administrative costs | |||||||||||
General and administrative costs principally consist of personnel costs related to our executive, legal, finance and human resources staff, professional fees including legal and accounting costs, occupancy costs and public company costs. Additionally, general and administrative costs include sales, use, goods and services tax and value added tax (collectively, the "transaction taxes") as well as property taxes. For our U.S. and some of our international cinema license and product revenue, we absorb the majority of the transaction taxes. | |||||||||||
Share-based compensation | |||||||||||
We account for share-based awards granted to employees and directors by recording compensation expense based on estimated fair values. We estimate the fair value of share-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statements of operations. Share-based awards are attributed to expense using the straight-line method over the vesting period. We determine the value of each option award that contains a market condition using a Monte Carlo Simulation valuation model, while all other option awards are valued using the Black-Scholes valuation model as permitted under ASC 718, Compensation—Stock Compensation. The assumptions used in calculating the fair value of share-based payment awards represent our best estimates. Our estimates of the fair values of share-based awards granted and the resulting amounts of share-based compensation recognized may be impacted by certain variables including stock price volatility, employee stock option exercise behaviors, additional stock option grants, modifications, estimates of forfeitures, and the related income tax impact. If any of the assumptions used in our valuation models significantly change, share-based compensation for future awards may differ materially from the awards granted previously. See Note 9, Share-based compensation. | |||||||||||
Foreign currency | |||||||||||
Local currency transactions of our foreign operations that have the U.S. dollar as their functional currency are remeasured into U.S. dollars using current rates of exchange for monetary assets and liabilities and historical rates of exchange for nonmonetary assets and liabilities. Gains and losses from remeasurement of monetary assets and liabilities are included in other income (loss) in our statements of operations. | |||||||||||
The assets and liabilities of our foreign operations for which the functional currency is not the U.S. dollar are translated into U.S. dollars at exchange rates as of the balance sheet date, revenues and expenses are translated at average exchange rates for the period, and equity balances are translated at the historical rate. Resulting translation adjustments are included in other comprehensive loss, a component of equity (deficit). | |||||||||||
Net losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency and the net realized and unrealized gains and losses related to forward contracts totaled $0.6 million, $0.9 million and $0.5 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively, and are included in other income (loss). | |||||||||||
Income taxes | |||||||||||
Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities at year-end and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized. | |||||||||||
Accruals for uncertain tax positions are provided for in accordance with the authoritative guidance for accounting for uncertainty in income taxes (ASC 740). We may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The authoritative guidance for accounting for uncertainty in income taxes also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Our policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. | |||||||||||
Employee benefit plans | |||||||||||
We have a voluntary 401(k) saving plans in which most U.S. employees are eligible to participate. Eligible employees may make contributions not to exceed the maximum statutory contribution amounts. We may match a percentage of each employee's contributions consistent with the provisions of the plan for which they are eligible. All employee and employer contributions fully vest immediately. Our contributions to these plans totaled $0.6 million, $0.6 million and $0.5 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | |||||||||||
Recent accounting pronouncements | |||||||||||
In July 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-10, "Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (Or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes". The objective of ASU 2013-10 is to provide for the inclusion of the Fed Funds Effective Swap Rate (OIS) as a U.S. benchmark interest rate for hedge accounting purposes, in addition to direct Treasury obligations of the U.S. government (UST) and, for practical reasons, the London Interbank Offered Rate (LIBOR) swap rate. ASU 2013-10 is effective prospectively for qualifying new or redesignated hedging relationship entered into on or after July 17, 2013. The adoption of ASU 2013-10 did not have a material impact on our consolidated financial statements. | |||||||||||
In July 2013, the FASB issued ASU 2013-11, "Income Taxes (Topic 740) Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists", which concludes that an unrecognized tax benefit should be presented as a reduction of a deferred tax asset when settlement in this manner is available under the tax law. The Company will adopt this amendment as of our 2015 fiscal year. The result of adoption may be to reclassify certain long term liabilities to long term deferred tax assets and the adoption will not result in a change to the tax provision. We do not expect the adoption of ASU 2013-11 to have a material impact on our consolidated financial statements. | |||||||||||
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)", effective for RealD as of April 1, 2017 (the first quarter of fiscal year 2018). The new standard will be implemented retrospectively with the Company choosing to either restate prior periods or recognize the cumulative effect. The new Topic 606 does not apply to lease contracts within the scope of Topic 840 leases. The objective of ASU 2014-09 is to provide guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. This ASU will supersede the revenue recognition requirements in Topic 605, "Revenue Recognition", and most industry-specific guidance. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today's guidance. | |||||||||||
Property_and_equipment_RealD_C
Property and equipment, RealD Cinema Systems and digital projectors | 12 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Property and equipment, RealD Cinema Systems and digital projectors | ' | |||||||
Property and equipment, RealD Cinema Systems and digital projectors | ' | |||||||
3. Property and equipment, RealD Cinema Systems and digital projectors | ||||||||
Property and equipment, RealD Cinema Systems and digital projectors consist of the following: | ||||||||
(in thousands) | March 31, | March 31, | ||||||
2014 | 2013 | |||||||
RealD Cinema Systems | $ | 205,416 | $ | 194,527 | ||||
Digital projectors—held for sale | 216 | 1,634 | ||||||
Leasehold improvements | 16,935 | 14,442 | ||||||
Machinery and equipment | 4,753 | 6,198 | ||||||
Furniture and fixtures | 1,272 | 1,122 | ||||||
Computer equipment and software | 9,197 | 7,628 | ||||||
Construction in process | 1,554 | 2,637 | ||||||
| | | | | | | | |
Total | $ | 239,343 | $ | 228,188 | ||||
Less accumulated depreciation | (110,060 | ) | (77,079 | ) | ||||
| | | | | | | | |
Property and equipment, RealD Cinema Systems and digital projectors, net | $ | 129,283 | $ | 151,109 | ||||
| | | | | | | | |
| | | | | | | | |
Depreciation expense amounted to $39.0 million, $32.7 million and $28.1 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | ||||||||
During the year ended March 31, 2014, we received $0.3 million in cash from motion picture exhibitor customers for the sale of digital projectors. | ||||||||
During the year ended March 31, 2013, we received $2.5 million in cash from motion picture exhibitor customers for the sale of digital projectors that was included in accounts receivable as of March 23, 2012. | ||||||||
During the year ended March 23, 2012, we received $4.0 million in cash and had $2.5 million of accounts receivable from motion picture exhibitor customers for the sale of digital projectors, resulting in a gain of $1.7 million in other income (loss). | ||||||||
During the year ended March 31, 2013, we determined that a non-cancelable purchase commitment for certain cinema systems configurations in the aggregate amount of $3.5 million was not fully recoverable, primarily due to the initial investment costs which are expected to exceed the anticipated future cash flows for the related cinema systems. | ||||||||
For the years ended March 31, 2014, March 31, 2013 and March 23, 2012, impairment expense charged to cost of revenue totaled $4.5 million, $8.7 million and $10.3 million, respectively. | ||||||||
Goodwill_and_intangible_assets
Goodwill and intangible assets | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Goodwill and intangible assets | ' | |||||||||||||
Goodwill and intangible assets | ' | |||||||||||||
4. Goodwill and intangible assets | ||||||||||||||
Goodwill and intangible assets consist of the following at: | ||||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||||
(in thousands) | Gross | Accumulated | Gross | Accumulated | ||||||||||
amount | amortization | amount | amortization | |||||||||||
Acquired developed technologies | $ | 9,324 | $ | 3,170 | $ | 9,324 | $ | 1,907 | ||||||
Goodwill | 10,657 | — | 10,657 | — | ||||||||||
| | | | | | | | | | | | | | |
Total | $ | 19,981 | $ | 3,170 | $ | 19,981 | $ | 1,907 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Amortization expense amounted to $1.3 million, $0.4 million and $0.2 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | ||||||||||||||
In the fiscal year ended March 31, 2013, we purchased a portfolio of 2D-to-3D conversion patents in the amount of $6.1 million and may consider future purchases of intangible assets, acquisitions or other investing activities. | ||||||||||||||
At March 31, 2014, the remaining amortization expense is estimated to be as follows (in thousands): | ||||||||||||||
Fiscal year 2015 | $ | 1,269 | ||||||||||||
Fiscal year 2016 | 1,272 | |||||||||||||
Fiscal year 2017 | 1,269 | |||||||||||||
Fiscal year 2018 | 1,256 | |||||||||||||
Fiscal year 2019 | 464 | |||||||||||||
Thereafter | 624 | |||||||||||||
| | | | | ||||||||||
Total | $ | 6,154 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Intangibles are deemed to have finite lives and consist of acquired developed technologies (which are primarily patents) and are amortized over their estimated useful lives of 5 to 19 years (with a weighted average remaining amortization period of 5.8 years) using the straight-line method. | ||||||||||||||
Accrued_expenses_and_other_lia
Accrued expenses and other liabilities | 12 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Accrued expenses and other liabilities | ' | ||||||||||
Accrued expenses and other liabilities | ' | ||||||||||
5. Accrued expenses and other liabilities | |||||||||||
Accrued expenses and other liabilities consist of the following at: | |||||||||||
(in thousands) | March 31, | March 31, | |||||||||
2014 | 2013 | ||||||||||
Payroll and compensation | $ | 5,070 | $ | 4,530 | |||||||
Sales, use taxes and other taxes | 6,582 | 6,960 | |||||||||
Professional fees | 1,484 | 1,005 | |||||||||
Refundable deposits | 108 | 1,227 | |||||||||
Marketing | 567 | 545 | |||||||||
RealD Cinema system installation fees | 4,134 | 3,303 | |||||||||
Purchase obligations | — | 3,450 | |||||||||
Other | 3,951 | 3,993 | |||||||||
| | | | | | | | ||||
Total | $ | 21,896 | $ | 25,013 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
For our U.S. and some of our international cinema license and product revenues, we absorb the majority of the sales and use taxes and value added taxes and do not pass such costs on to our customers. | |||||||||||
Cost reduction plan | |||||||||||
During fiscal year 2014, we implemented a plan to reduce the overall costs of our global operations while continuing to make significant research and development investments and build the framework for our future growth. This cost reduction plan is primarily a response to the 3D box office performance of certain motion pictures due to consumer preference and the fact that our 3D cinema business is maturing in many markets like the United States where we expect equipment installations to begin to slow, and the resulting impact on our financial results and operations. As a result of our cost reduction plan, we reduced our staff by approximately 20%, rescoped and made other changes to certain research and development projects, reduced general and administrative expenses and streamlined certain manufacturing operations. These actions are intended to rationalize the further expansion of our global cinema platform by focusing on emerging growth markets, streamlining our manufacturing facilities to achieve cost efficiencies while meeting the future commercial demands of our customers and focusing our research and development efforts on technologies that will enable us to expand our visual technology product offerings. | |||||||||||
An element of the cost reduction plan is to reduce our workforce by approximately 20%, resulting in termination and related charges of approximately $5.3 million. Further, we expect to incur approximately $0.6 million in other charges principally related to the accrual of losses for a lease for certain manufacturing facilities that will no longer be used in our operations. Therefore, the total charges associated with the cost reduction plan currently are estimated to be approximately $5.9 million. The following table summarizes the actual fiscal year 2014 and currently estimated charges resulting from implementation of the cost reduction plan: | |||||||||||
Fiscal year ended March 31, 2014 | |||||||||||
(in thousands) | Personnel | Leasehold | Total | ||||||||
Cost of revenue | $ | 835 | $ | 13 | $ | 848 | |||||
Research and development | 757 | — | 757 | ||||||||
Selling and marketing | 1,830 | — | 1,830 | ||||||||
General and administrative | 1,206 | 77 | 1,283 | ||||||||
| | | | | | | | | | | |
Total FY2014 Actual | $ | 4,628 | $ | 90 | $ | 4,718 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The following table summarizes the actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities: | |||||||||||
Cost reduction plan liabilities | |||||||||||
(in thousands) | Personnel | Leasehold | Total | ||||||||
Cost reduction plan liabilities as of April 1, 2013 | $ | — | $ | — | $ | — | |||||
Charges | 4,628 | 90 | 4,718 | ||||||||
(Payments) | (3,212 | ) | (90 | ) | (3,302 | ) | |||||
| | | | | | | | | | | |
Cost reduction plan liabilities as of March 31, 2014 | $ | 1,416 | $ | — | $ | 1,416 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
We initiated most of the above-noted cost reduction actions by the end of fiscal year 2014. Leasehold improvements at the existing manufacturing facility were fully impaired for a $0.1 million charge to cost of revenue. Certain office space includes approximately $7.0 million in leasehold improvements within fixed assets, which could become subject to an impairment assessment upon a future change in circumstances. | |||||||||||
There is no guarantee that termination and implementation costs will not exceed the estimates, or that any net cost reduction will actually be achieved. | |||||||||||
The Company records the cost reduction plan activities in accordance with the Accounting Standards Codification (ASC), including ASC 420 Exit or Disposal Cost Obligations, ASC 712 Compensation—Nonretirement Postemployment Benefits and ASC 360 Property, Plant, and Equipment (Impairment or Disposal of Long-Lived Assets). | |||||||||||
Borrowings
Borrowings | 12 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Borrowings | ' | |||||||
Borrowings | ' | |||||||
6. Borrowings | ||||||||
Credit Agreement | ||||||||
On April 19, 2012, we entered into a credit agreement (the "Credit Agreement") with City National Bank, a national banking association ("City National"). Pursuant to the Credit Agreement, the lenders thereunder will make available to us: | ||||||||
• | ||||||||
a revolving credit facility (including a letter of credit sub-facility) in a maximum amount not to exceed $75 million (the "Revolving Facility"); and | ||||||||
• | ||||||||
a delayed-draw term loan facility in a maximum amount not to exceed $50 million (the "Term Loan Facility"). During the first quarter of fiscal year 2013, we borrowed $25 million under the Term Loan Facility, resulting in $25 million being available for future draws. During the second quarter of fiscal 2014, we borrowed an additional $25 million, fully drawing down the Term Loan Facility. During the second quarter of fiscal 2013, we repaid $12.5 million of the Term Loan Facility. On December 31, 2013, we commenced the first of 12 quarterly installments of $3.1 million to pay off the Term Loan Facility by September 30, 2016. | ||||||||
The Revolving Facility and the Term Loan Facility replaced existing revolving and term loan facilities provided under our pre-existing credit and security agreement with City National, which had been most recently amended on December 6, 2011. | ||||||||
Debt issuance costs related to the completion of the Credit Agreement totaled $1.2 million and were recorded as a deferred charge. The issuance costs are being amortized over the contractual life of the agreement and recorded as interest expense. | ||||||||
Our obligations under the Credit Agreement are secured by a first priority security interest in substantially all of our tangible and intangible assets and are fully and unconditionally guaranteed by our subsidiaries, ColorLink Inc., a Delaware corporation ("ColorLink"), and Stereographics Corporation, a California corporation ("Stereographics"). In connection with our execution of the Credit Agreement, on April 19, 2012, each of ColorLink and Stereographics entered into a general continuing guaranty (the "Guaranty") in favor of City National and the lenders under the Credit Agreement, pursuant to which they irrevocably and unconditionally guaranteed our obligations under the Credit Agreement and all related loan documents. In addition, on April 19, 2012, we, ColorLink and Stereographics entered into a security agreement in favor of City National and the lenders under the Credit Agreement, pursuant to which they granted a security interest in substantially all of their assets to secure their obligations under the Credit Agreement, the Guaranty and the related loan documents. | ||||||||
As of March 31, 2014, there were $36.3 million in borrowings under the Credit Agreement. The current and non-current portions of the Credit Agreement due as of March 31, 2014 and March 31, 2013 were as follows: | ||||||||
March 31, | March 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Current portion of Credit Agreement | $ | 12,500 | $ | 1,042 | ||||
Credit Agreement, net of current portion | 23,750 | 46,458 | ||||||
| | | | | | | | |
Total Credit Agreement | $ | 36,250 | $ | 47,500 | ||||
| | | | | | | | |
| | | | | | | | |
The Revolving Facility matures on April 17, 2015 with $5.0 million drawn as of March 31, 2014. Through March 31, 2014, the aggregate Term Loan Facility commitment of $50 million had been drawn in full and $18.7 million had been repaid, resulting in an outstanding balance of $31.3 million to be repaid in 10 remaining quarterly installments of $3.1 million through September 30, 2016. | ||||||||
At March 31, 2014, our future minimum Credit Agreement obligations were as follows: | ||||||||
Fiscal year 2015 | $ | 12,500 | ||||||
Fiscal year 2016 | 17,500 | |||||||
Fiscal year 2017 | 6,250 | |||||||
| | | | | ||||
Total | $ | 36,250 | ||||||
| | | | | ||||
| | | | | ||||
Under the Credit Agreement, our business is subject to certain limitations, including limitations on our ability to incur additional debt, make certain investments or acquisitions, enter into certain merger and consolidation transactions, and sell our assets other than in the ordinary course of business. We are also required to maintain compliance with certain financial covenants, including a minimum fixed charge coverage ratio and a maximum leverage ratio. As of March 31, 2014, we were in compliance with all financial covenants in our Credit Agreement. If we fail to comply with any of the covenants or if any other event of default, as defined in our Credit Agreement, should occur, the bank lenders could elect to prevent us from borrowing and declare the indebtedness to be immediately due and payable. | ||||||||
Our Revolving Facility provides for, at our option, Eurodollar Rate Loans, which bears interest at the London Interbank Offered Rate ("LIBOR") plus two and one-half percent (2.50%) or Base Rate Loans, which bear interest at the greatest of (a) the Federal Funds Rate plus one-half of one percent (0.50%), (b) the Prime Rate, and (c) the Eurodollar Rate for a one month Interest Period on such day plus one percent (1.00%), plus one and one-half percent (1.50%). Our Revolving Facility also bears a commitment fee equal to one-quarter percent (0.25%) per annum times the actual daily amount of unused balance. | ||||||||
As of March 31, 2014, there were $36.3 million in borrowings outstanding under the Credit Agreement. As of March 31, 2014, borrowings outstanding under the Credit Agreement bear interest at 2.88%. As of March 31, 2013, there were $47.5 million in borrowings outstanding under the Credit Agreement. As of March 31, 2013, borrowings outstanding under the Credit Agreement bore interest at 3.03%. As of March 23, 2012, there were $25.0 million borrowings outstanding under the Credit Agreement. As of March 23, 2012, borrowings outstanding under the Credit Agreement bore interest at 3.50%. Interest expense related to our borrowings under our credit and security agreement was $1.8 million, $1.1 million and $0.9 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | ||||||||
Notes payable | ||||||||
From time to time, we enter into equipment purchase agreements with certain of our vendors for the purchase of digital projectors, digital servers, lenses and accessories. We pay a portion of the cost of the equipment upon delivery and finance a portion of the purchase price by issuing notes payable. The equipment is included in digital projectors in the accompanying consolidated balance sheets. Certain of these notes payables are non-interest bearing. In those cases, we record the net present value of the notes payable assuming an implied annual interest rate which is approximately 8.4%. The notes are secured by the underlying equipment. There was no notes payable outstanding as of March 31, 2014 and March 31, 2013. Interest expense is based on annual interest rates ranging from 7.0% to 8.4%. There was no interest expense related to our notes payable for the years ended March 31, 2014 and March 31, 2013. Interest expense related to our notes payable was $0.1 million the year ended March 23, 2012. | ||||||||
Commitments_and_contingencies
Commitments and contingencies | 12 Months Ended | ||||
Mar. 31, 2014 | |||||
Commitments and contingencies | ' | ||||
Commitments and contingencies | ' | ||||
7. Commitments and contingencies | |||||
Lease obligations | |||||
We lease certain office, production and research and development space under non-cancelable operating leases that expire at various dates. Certain operating leases provide us with the option to renew for additional periods. Where operating leases contain escalation clauses, rent abatements, and/or concessions, such as rent holidays and landlord or tenant incentives or allowances, we apply them in the determination of straight-line rent expense over the lease term. Certain operating leases require the payment of real estate taxes or other occupancy costs, which may be subject to escalation. | |||||
At March 31, 2014, our future minimum lease obligations were as follows (in thousands): | |||||
Fiscal year 2015 | $ | 7,260 | |||
Fiscal year 2016 | 4,189 | ||||
Fiscal year 2017 | 3,966 | ||||
Fiscal year 2018 | 3,969 | ||||
Fiscal year 2019 | 3,881 | ||||
Thereafter | 14,147 | ||||
| | | | | |
Total | $ | 37,412 | |||
| | | | | |
| | | | | |
Rent expense was $6.6 million, $5.2 million and $4.3 million for the fiscal years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | |||||
Indemnities and commitments | |||||
During the ordinary course of business, we make certain indemnities and commitments under which we may be required to make payments in relation to certain transactions. These indemnities include indemnities of certain customers and licensees of our technologies, and indemnities to our directors and officers to the maximum extent permitted under the laws of the State of California. The duration of these indemnities and commitments varies, and in certain cases, is indefinite. The majority of these indemnities and commitments do not provide for any limitation of the maximum potential future payments we could be obligated to make. We have not recorded any liability for these indemnities and commitments in the accompanying consolidated balance sheets. We do, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is reasonably probable and estimable. | |||||
We have entered into contracts with certain of our vendors. Future obligations under such contracts totaled $8.0 million at March 31, 2014 and include revolving 90-day supply commitments. Many of the contracts contain cancellation penalty provisions requiring payment of up to 20.0% of the unused contract. | |||||
Contingencies and assessments | |||||
We are subject to various loss contingencies and assessments arising in the course of our business, some of which relate to litigation, claims, property taxes and sales and use tax or goods and services tax assessments. We consider the likelihood of the loss or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies and assessments. An estimated loss contingency or assessment is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted. Based on the information presently available, including discussion with counsel and other consultants, management believes that resolution of these matters will not have a material adverse effect on our business, consolidated results of operations, financial condition or cash flows. | |||||
Equity
Equity | 12 Months Ended | ||||
Mar. 31, 2014 | |||||
Equity | ' | ||||
Equity | ' | ||||
8. Equity | |||||
Common stock | |||||
At March 31, 2014, we reserved the following shares of common stock for future issuances in connection with: | |||||
(in thousands) | |||||
Restricted stock units | 716 | ||||
Performance stock options | 1,354 | ||||
Stock option plan: | |||||
Outstanding | 7,811 | ||||
Reserved for future issuance | 4,300 | ||||
| | | | | |
Total | 14,181 | ||||
| | | | | |
| | | | | |
Stock repurchase program | |||||
On April 20, 2012, we announced that our board of directors had approved an authorization to repurchase up to $50.0 million of RealD common stock. On December 14, 2012, our board of directors approved a $25 million increase in our stock repurchase plan, increasing the $50 million repurchase plan announced on April 20, 2012 to $75 million. The number of shares to be repurchased and the timing of any potential repurchases will depend on factors such as the Company's stock price, economic and market conditions, alternative uses of capital, and corporate and regulatory requirements. Repurchases of common stock may be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when RealD might otherwise be precluded from doing so under insider trading laws, and a variety of other methods, including open market purchases, privately negotiated transactions, block trades, accelerated share repurchase transactions, or by any combination of such methods. The repurchase program may be suspended or discontinued at any time. | |||||
Pursuant to our stock repurchase plan authorized by our board of directors, we have repurchased a total of 6,599,726 shares of common stock at an average price per share of $10.30, including sales commissions, for an aggregate cost of $68.0 million inception to date. For the fiscal year ended March 31, 2014, we repurchased a total of 671,997 shares of common stock at an average price per share of $11.18, including sales commissions, for an aggregate cost of $7.5 million. For the fiscal year ended March 31, 2013, we repurchased a total of 5,927,729 shares of common stock at an average price per share of $10.20, including sales commissions, for an aggregate cost of $60.4 million. | |||||
Sharebased_compensation
Share-based compensation | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Share-based compensation | ' | |||||||||||||
Share-based compensation | ' | |||||||||||||
9. Share-based compensation | ||||||||||||||
We account for share based payment awards granted to employees and directors by recording compensation expense based on estimated fair values. We estimate the fair value of share-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statements of operations. Share- based awards are attributed to expense using the straight-line method over the vesting period. We determine the value of each option award that contains a market condition using a Monte Carlo Simulation valuation model, while all other option awards are valued using the Black-Scholes valuation model as permitted under ASC 718, Compensation—Stock Compensation. The assumptions used in calculating the fair value of share-based payment awards represent our best estimates. Our estimates of the fair values of stock options granted and the resulting amounts of share-based compensation recognized may be impacted by certain variables including stock price volatility, employee stock option exercise behaviors, additional stock option grants, modifications, estimates of forfeitures and the related income tax impact. | ||||||||||||||
In April 2010, our board of directors unanimously adopted the RealD Inc. 2010 Stock Incentive Plan (the "2010 Stock Plan"), and in June 2010, our stockholders approved the 2010 Stock Plan. The board of directors intends for the 2010 Stock Plan to replace our 2004 Amended and Restated Stock Incentive Plan, (the "2004 Plan"), such that, effective with our IPO, we will no longer make any new grants under the 2004 Plan. Instead, the board of directors or our compensation committee will issue equity compensation awards under the 2010 Stock Plan. The stock plan provides for the granting of nonstatutory stock options, incentive stock options, stock appreciation rights, restricted stock awards and stock units to employees, officers, directors, non-employee directors and consultants. Additionally, in June 2011 our board of directors approved the RealD Inc. 2011 Employee Stock Purchase Plan (the "ESPP Plan") and in July 2011, our stockholders approved the ESPP Plan. Stock-based compensation expense related to the ESPP Plan for the year ended March 31, 2014 was $0.5 million. | ||||||||||||||
The following table reflects the components of share-based compensation expense recognized in our consolidated statements of operations for the years ended March 31, 2014, March 31, 2013 and March 23, 2012: | ||||||||||||||
Year ended | ||||||||||||||
(in thousands) | March 31, | March 31, | March 23, | |||||||||||
2014 | 2013 | 2012 | ||||||||||||
Cost of revenue | $ | 865 | $ | 807 | $ | 458 | ||||||||
Research and development | 2,708 | 2,185 | 2,604 | |||||||||||
Selling and marketing | 5,543 | 5,258 | 4,776 | |||||||||||
General and administrative | 8,625 | 10,224 | 7,906 | |||||||||||
| | | | | | | | | | | ||||
Total | $ | 17,741 | $ | 18,474 | $ | 15,744 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Stock options | ||||||||||||||
Stock options granted generally vest over a four-year period, with 25% of the shares vesting after one year and monthly vesting thereafter. The options generally expire ten years from the date of grant. Share-based compensation expense related to stock options was $13.8 million, $14.2 million and $12.3 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | ||||||||||||||
A summary of our stock option activity is as follows: | ||||||||||||||
(in thousands, except exercise price | Options | Weighted- | Weighted- | Aggregate | ||||||||||
data and contractual term data) | average | average | intrinsic | |||||||||||
exercise | remaining | value | ||||||||||||
price | contractual | |||||||||||||
term (years) | ||||||||||||||
Outstanding at March 31, 2013 | 9,082 | $ | 12.59 | |||||||||||
| | | | | | | | | | | | | | |
Granted | 716 | 12.88 | ||||||||||||
Exercised | (624 | ) | 3.36 | |||||||||||
Forfeited or expired | (1,363 | ) | 13.32 | |||||||||||
| | | | | | | | | | | | | | |
Outstanding at March 31, 2014 | 7,811 | $ | 13.11 | 6.2 | $ | 13,707 | ||||||||
| | | | | | | | | | | | | | |
Exercisable at March 31, 2014 | 6,027 | $ | 12.77 | 5.6 | $ | 12,998 | ||||||||
| | | | | | | | | | | | | | |
Vested or expected to vest | 7,687 | $ | 13.08 | 6.6 | $ | 13,614 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
The total intrinsic value of options exercised was $4.9 million, $2.6 million and $3.9 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | ||||||||||||||
Awards that are vested or expected to vest take into consideration estimated forfeitures for awards not yet vested. | ||||||||||||||
The weighted-average grant date fair values were determined using the Black- Scholes option-pricing model with the following weighted-average assumptions: | ||||||||||||||
Year ended | ||||||||||||||
March 31, | March 31, | March 23, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Fair value of stock options granted | $ | 7.2 | $ | 6.2 | $ | 11.39 | ||||||||
Expected volatility | 60 | % | 60 | % | 58 | % | ||||||||
Expected term (years) | 6 | 6 | 6 | |||||||||||
Risk-free rate | 1.4 | % | 1 | % | 2 | % | ||||||||
Expected dividends | — | — | — | |||||||||||
For purposes of determining the expected term and in the absence of historical data relating to stock option exercises, we apply a simplified approach: the expected term of awards granted is presumed to be the mid-point between the vesting date and the end of the contractual term. We use the contractual term when valuing awards to consultants. We use the average volatility of similar, publicly traded companies as an estimate for expected volatility. The risk-free interest rate for periods within the expected or contractual life of the option, as applicable, is based on the United States Treasury yield curve in effect during the period the options were granted. Our expected dividend yield is zero. | ||||||||||||||
As of March 31, 2014, there was $13.2 million of total unrecognized compensation costs related to stock option compensation arrangements granted which is expected to be recognized over the remaining weighted-average period of 2.07 years. | ||||||||||||||
Performance stock options | ||||||||||||||
Certain of our management-level employees receive performance stock options, which gives the recipient the right to receive common stock that is contingent upon achievement of specified pre-established performance goals over the performance period, which is generally three years subject to the recipient's continued service with us. The performance goals for the performance stock options are based on the measurement of our total stockholder return, on a percentile basis, compared to a comparable group of companies. Depending on the outcome of the performance goals, the recipient may ultimately earn performance stock options equal to or less than the number of performance stock options granted. In June 2013, our Chief Executive Officer's fiscal year 2013 stock option grant was amended to retroactively change the vesting schedule of the stock option so that it now vests based upon the achievement of performance goals rather than based solely upon Mr. Lewis' continued service with the Company. The performance goal is based on the measurement of our total stockholder return, on a percentile basis, compared to a comparable group of companies. The performance period for this performance stock option is between three and five years. For the years ended March 31, 2014 and March 31, 2013, share-based compensation expense related to performance stock options was $0.5 million and $1.9 million, respectively. | ||||||||||||||
The Monte Carlo Simulation valuation model uses terms based on the length of the performance period and compound annual growth rate goals for total stockholder return based on the provisions of the award. For purposes of determining the expected term and in the absence of historical data relating to stock option exercises, we apply a simplified approach: the expected term of awards granted is presumed to be the mid-point between the vesting date and the end of the contractual term. We use the average volatility of a peer group of companies as an estimate for expected volatility. The risk-free interest rate for periods within the expected or contractual life of the option, as applicable, is based on the United States Treasury yield curve in effect during the period the options were granted. | ||||||||||||||
A summary of our performance stock option activity is as follows: | ||||||||||||||
(in thousands, except exercise price | Options | Weighted- | Weighted- | |||||||||||
data and contractual term data) | average | average | ||||||||||||
exercise | remaining | |||||||||||||
price | contractual | |||||||||||||
term (years) | ||||||||||||||
Outstanding at March 31, 2013 | 589 | $ | 16 | 7.3 | ||||||||||
Granted | 450 | 14.45 | 9.2 | |||||||||||
Exercised | — | — | ||||||||||||
Forfeited or expired | (353 | ) | 16 | |||||||||||
| | | | | | | | | | | ||||
Outstanding at March 31, 2014 | 686 | $ | 14.98 | 8.2 | ||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Certain of our management-level employees also receive performance stock units, which gives the recipient the right to receive common stock that is contingent upon achievement of specific pre-established performance goals over the performance period, which is generally two years subject to the recipient's continued service with us. The performance goals are based on achieving certain levels of total licensing revenue over the performance period. Depending on the outcome of the performance goals, the recipient may ultimately earn performance stock units between 0% and 200% of the number of performance stock units granted. For the years ended March 31, 2014 and March 31, 2013, there was no share-based compensation expense related to performance stock units. | ||||||||||||||
Restricted stock units | ||||||||||||||
Certain of our employees, including certain management level employees, receive time-based restricted stock units. These restricted stock units vest over one to three years based upon a recipient's continued service with us. For the year ended March 31, 2014, we granted 0.6 million restricted stock units at a weighted average grant date fair value of $12.29 per restricted stock unit. For the year ended March 31, 2013, we granted 0.2 million restricted stock units at a weighted average grant date fair value of $10.55 per restricted stock unit. For the years ended March 31, 2014 and March 31, 2013, respectively, share- based compensation expense related to restricted stock units was $3.3 million and $2.2 million, respectively. | ||||||||||||||
The following summarizes select information regarding our restricted stock units during the year ended March 31, 2014: | ||||||||||||||
(in thousands, except grant | Units | Weighted- | ||||||||||||
date fair value data) | average | |||||||||||||
grant date | ||||||||||||||
fair value | ||||||||||||||
Nonvested at March 31, 2013 | 181 | $ | 14.83 | |||||||||||
Granted | 595 | 12.29 | ||||||||||||
Vested | (205 | ) | 11.98 | |||||||||||
Forfeited | (92 | ) | 13.58 | |||||||||||
| | | | | | | | |||||||
Nonvested at March 31, 2014 | 479 | $ | 13.13 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
As of March 31, 2014, there was $6.1 million of total unrecognized compensation costs related to restricted stock units granted which is expected to be recognized over the remaining weighted-average period of 3.1 years. | ||||||||||||||
The total fair values of restricted stock units that vested was $2.5 million, $2.2 million and $1.0 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | ||||||||||||||
Income_taxes
Income taxes | 12 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Income taxes | ' | ||||||||||
Income taxes | ' | ||||||||||
10. Income taxes | |||||||||||
The income tax provision from continuing operations for the fiscal years ended March 31, 2014, March 31, 2013 and March 23, 2012 consists of the following: | |||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
Current income tax provision: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | 132 | 103 | 119 | ||||||||
Foreign | 6,128 | 5,202 | 4,948 | ||||||||
| | | | | | | | | | | |
6,260 | 5,305 | 5,067 | |||||||||
Deferred income tax benefit: | |||||||||||
Federal | — | — | — | ||||||||
State | — | — | — | ||||||||
Foreign | (143 | ) | (241 | ) | 38 | ||||||
| | | | | | | | | | | |
Total income tax provision from continuing operations | $ | 6,117 | $ | 5,064 | $ | 5,105 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Income (loss) from continuing operations before income taxes consisted of the following: | |||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
United States | (11,224 | ) | (6,963 | ) | 37,600 | ||||||
Foreign | 6,131 | 2,140 | 4,530 | ||||||||
| | | | | | | | | | | |
Total | (5,093 | ) | (4,823 | ) | 42,130 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Significant components of our deferred tax balances are as follows: | |||||||||||
(in thousands) | March 31, | March 31, | |||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | 24,971 | 26,359 | |||||||||
Deferred revenues | 2,708 | 4,403 | |||||||||
Accruals, reserves and allowances | 7,698 | 6,771 | |||||||||
Stock compensation | 15,796 | 13,220 | |||||||||
Intangible assets | — | 16 | |||||||||
Foreign tax credit carryovers | 15,181 | 11,571 | |||||||||
Partnership interest | 44 | ||||||||||
Other | 1,445 | 1,255 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 67,843 | 63,595 | |||||||||
Deferred tax liabilities | |||||||||||
Fixed assets | (15,020 | ) | (18,757 | ) | |||||||
Intangible assets | (118 | ) | — | ||||||||
Partnership interest | — | (113 | ) | ||||||||
Unbilled receivables | (5,821 | ) | (5,385 | ) | |||||||
Other | (426 | ) | (115 | ) | |||||||
| | | | | | | | ||||
Total deferred tax liabilities | (21,385 | ) | (24,370 | ) | |||||||
Valuation allowance | (46,175 | ) | (39,084 | ) | |||||||
| | | | | | | | ||||
Net deferred tax assets | 283 | 141 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Due to the uncertainties surrounding the timing and realization of the benefits from our tax attributes in future tax returns, we have placed a valuation allowance against primarily all of our otherwise recognizable net deferred tax assets as of March 31, 2014, March 31, 2013 and March 23, 2012. As a result, we increased our valuation allowance through the operating statement as follows: | |||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | |||||||||
2014 | 2013 | ||||||||||
Through continuing operation | $ | 7,091 | $ | 5,090 | |||||||
| | | | | | | | ||||
Increase in valuation allowance | 7,091 | 5,090 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
The income tax provision from continuing operations differs from the amount computed by applying the U.S. statutory federal income tax rate of 34.0% to the pretax income (loss) as a result of the following differences: | |||||||||||
Year ended | |||||||||||
March 31, | March 31, | March 23, | |||||||||
2014 | 2013 | 2012 | |||||||||
Federal tax at statutory rate | 34 | % | 34 | % | 34 | % | |||||
State tax, net of federal benefit | (1.4 | )% | (7.7 | )% | 1.6 | % | |||||
Foreign tax rate differential | 8.6 | % | 2.9 | % | 0.5 | % | |||||
LLC income minority interest not taxed | 1.4 | % | (1.3 | )% | (0.1 | )% | |||||
Revaluation of deferred taxes due to changes in effective income tax rates | (0.8 | )% | 3.8 | % | (1.4 | )% | |||||
Research tax credits | (0.9 | )% | 0 | % | 0 | % | |||||
Permanent differences and other | 15.2 | % | 3.7 | % | (0.7 | )% | |||||
Stock compensation | (37.0 | )% | (34.9 | )% | 0 | % | |||||
Change in valuation allowance | (139.0 | )% | (105.5 | )% | (21.8 | )% | |||||
| | | | | | | | | | | |
Total tax benefit | (119.9 | )% | (105.0 | )% | 12.1 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
As of March 31, 2014, we had net operating loss carryforwards of approximately $125.2 million for federal and $64.5 million for state purposes. Federal and state net operating loss carryforwards begin to expire in year 2020 and 2019, respectively. As of March 31, 2014, we had foreign tax credit carryforwards of approximately $15.2 million for federal income tax purposes that begin to expire in the year 2019. | |||||||||||
The U.S. Internal Revenue Code of 1986, as amended, generally imposes an annual limitation on a corporation's ability to utilize net operating loss carryovers ("NOLs") if it experiences an ownership change as defined in Section 382. In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50% over a three year period. In the event that an ownership change has occurred, or were to occur, utilization of the Company's NOLs would be subject to an annual limitation under Section 382 as determined by multiplying the value of the Company's stock at the time of the ownership change by the applicable long-term tax-exempt rate as defined in the Internal Revenue Code. Any unused annual limitation may be carried over to later years. The Company could experience an ownership change under Section 382 as a result of events in the past in combination with events in the future. If so, the use of the Company's NOLs, or a portion thereof, against future taxable income may be subject to an annual limitation under Section 382, which may result in expiration of a portion of the NOLs before utilization. To the extent our use of net operating loss carryforwards is significantly limited under the rules of Section 382 (as a result of our IPO or otherwise), our income could be subject to U.S. corporate income tax earlier than it would if we were able to use net operating loss carryforwards, which would result in lower profits. Any carry-forwards that expire prior to utilization as a result of such limitations will be removed, if applicable, from deferred tax assets with a corresponding reduction of the valuation allowance. | |||||||||||
We recognize excess tax benefits associated with share-based compensation and motion picture exhibitor options to stockholders' equity only when realized. As of March 31, 2014, we have approximately $22.7 million of unrealized excess tax benefits associated with share-based compensation and exhibitor options. These tax benefits will be accounted for as a credit to additional paid-in capital, if and when realized, rather than a reduction of the provision for income taxes. | |||||||||||
We adopted accounting for uncertain tax positions pursuant to ASC 740, Income Taxes. The following table summarizes the activity related to our unrecognized tax benefits (in thousands): | |||||||||||
Balance as of March 31, 2013 | $ | 346 | |||||||||
Increases related to prior year tax positions | — | ||||||||||
Increase related to current year tax positions | — | ||||||||||
Expiration of the statute of limitations for the assessment of taxes | — | ||||||||||
Settlements | — | ||||||||||
| | | | | |||||||
Balance as of March 31, 2014 | $ | 346 | |||||||||
| | | | | |||||||
| | | | | |||||||
Approximately $0.3 million of the unrecognized tax benefits will decrease the effective tax rate if recognized, subject to the valuation allowance. | |||||||||||
It is not anticipated that there will be a significant change in the unrecognized tax benefits over the next 12 months. | |||||||||||
Due to the net operating loss carryforwards, our United States federal and state returns are open to examination by the Internal Revenue Service and state jurisdictions for all years since inception. | |||||||||||
Our policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. As of March 31, 2014, amounts for accrued interest and penalties associated with uncertain tax positions were not significant. | |||||||||||
On September 13, 2013, the U.S. Treasury Department released final income tax regulations on the deduction and capitalization of expenditures related to tangible property. These final regulations apply to tax years beginning on or after January 1, 2014, and may be adopted in earlier years. We do not intend to early adopt the tax treatment of expenditures to improve tangible property and the capitalization of inherently facilitative costs to acquire tangible property as of January 1, 2013. The tangible property regulations will require us to make additional tax accounting method changes as of April 1, 2014; however we do not anticipate the impact of these changes to be material to our consolidated financial statements. | |||||||||||
As of March 31, 2014, unremitted earnings of the subsidiary outside of the United States were approximately $24.7 million, on which no United States taxes had been provided. Our current intention is to reinvest these earnings outside the United States. It is not practicable to estimate the amount of additional taxes that might be payable upon repatriation of foreign earnings. | |||||||||||
Relatedparty_transactions
Related-party transactions | 12 Months Ended |
Mar. 31, 2014 | |
Related-party transactions | ' |
Related-party transactions | ' |
11. Related-party transactions | |
On May 19, 2011, we entered into a separation agreement and general release of claims with Joshua Greer, a former director and executive officer of the Company. Pursuant to the terms of the separation agreement, Mr. Greer received the following benefits: (i) cash severance of $450,000 paid in ten equal installments, with the first such installment paid on October 15, 2011; (ii) reimbursement from us for insurance coverage under COBRA for 18 months following July 15, 2011 or such earlier time as Mr. Greer becomes eligible for insurance through another employer; (iii) a pro-rated cash performance bonus for fiscal year 2012 (to be paid no later than June 15, 2012), in an amount equal to 30% of 80% of Mr. Greer's salary, computed assuming that Mr. Greer had remained as our president through the end of fiscal year 2012; and (iv) acceleration of a time-based vesting stock option for 105,000 shares granted to Mr. Greer on July 15, 2010 as of July 15, 2011, which remained exercisable for six months following the end of the term of the consulting agreement that we entered into with Mr. Greer on the same date. A second stock option for 105,000 shares granted to Mr. Greer on July 15, 2010 was entirely forfeited and cancelled without consideration. We entered into a consulting agreement with Mr. Greer pursuant to which Mr. Greer was paid $275,000 per year commencing as of July 16, 2011. The consulting agreement with Mr. Greer expired on July 16, 2012. On June 21, 2012, Mr. Greer notified us of his resignation from our board of directors, effective on July 16, 2012 upon the expiration of the consulting agreement. During the year ended March 31, 2013, we paid Mr. Greer $225,000 pursuant to his separation agreement and $148,958 pursuant to his consulting agreement. | |
We entered into a consulting agreement, effective as of May 29, 2012 (the "DCH Agreement"), with DCH Consultants LLC ("DCH"), an entity controlled by Mr. David Habiger. Mr. Habiger is a member of the Company's Board of Directors, its Nominating and Corporate Governance Committee and its Compensation Committee. | |
Pursuant to the DCH Agreement, DCH provided certain consulting services regarding the application of one or more of our technologies in the consumer electronics industry. The DCH Agreement had a term of 4 months and DCH was entitled to receive aggregate fixed compensation of $20,000 per month during the term of the DCH Agreement. Although we had the right to extend the engagement for up to two additional months on the same terms, by providing DCH with 10 days written notice prior to the end of the original term, we did not extend the DCH Agreement and it expired as of September 29, 2012. | |
During the fiscal year ended March 31, 2013, we paid DCH $80,239 pursuant to the DCH Agreement. | |
During the fiscal year ended March 31, 2014, there were no related party transactions. | |
Segment_and_geographic_informa
Segment and geographic information | 12 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Segment and geographic information | ' | ||||||||||
Segment and geographic information | ' | ||||||||||
12. Segment and geographic information | |||||||||||
For financial reporting purposes we currently have one reportable segment. We have three operating segments: cinema, consumer electronics and professional. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our Chief Executive Officer. We aggregate our three operating segments into one reportable segment based on qualitative factors including similar economic characteristics and the nature of the products and services. Our product portfolio is used in applications that enable a premium 3D viewing experience across the segments. We currently generate substantially all of our revenue from the license of our RealD Cinema Systems and the sale of our eyewear, which together enable a digital cinema projector to show 3D motion pictures. | |||||||||||
Our top 10 customers with an accounts receivable balance represented approximately 47% and 47% of our net accounts receivable as of March 31, 2014 and March 31, 2013, respectively. Our top 10 customers accounted for approximately 46%, 44% and 46% of our revenue for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | |||||||||||
As of March 31, 2014, we had two licensees that accounted for more than 10% of our gross license revenue, one of which accounted for 14% and the other 13%. No licensee accounted for more than 10% of our gross license revenue in fiscal years 2013 or 2012. | |||||||||||
Geographic information | |||||||||||
Revenue by geographic region, as determined based on the location of our customers or the anticipated destination of use was as follows: | |||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
Domestic (United States and Canada) | $ | 96,159 | $ | 106,979 | $ | 126,151 | |||||
International | 103,075 | 108,573 | 120,477 | ||||||||
| | | | | | | | | | | |
Total revenues | $ | 199,234 | $ | 215,552 | $ | 246,628 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Long-lived tangible assets, net of accumulated depreciation, by geographic region were as follows: | |||||||||||
(in thousands) | March 31, | March 31, | |||||||||
2014 | 2013 | ||||||||||
Domestic (United States and Canada) | $ | 105,708 | $ | 101,438 | |||||||
International | 23,575 | 49,671 | |||||||||
| | | | | | | | ||||
Total long-lived tangible assets | $ | 129,283 | $ | 151,109 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Quarterly_financial_data_unaud
Quarterly financial data (unaudited) | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Quarterly financial data (unaudited) | ' | |||||||||||||
Quarterly financial data (unaudited) | ' | |||||||||||||
13. Quarterly financial data (unaudited) | ||||||||||||||
Three months ended | ||||||||||||||
(dollars in thousands, except per share data) | March 31, | December 31, | September 30, | June 30, | ||||||||||
2014 | 2013 | 2013 | 2013 | |||||||||||
Net revenue | $ | 40,648 | $ | 55,438 | $ | 43,929 | $ | 59,219 | ||||||
Gross profit | 19,902 | 27,270 | 19,906 | 28,181 | ||||||||||
Net loss | (4,855 | ) | (155 | ) | (4,664 | ) | (1,536 | ) | ||||||
Net loss attributable to RealD Inc. common stockholders | $ | (4,950 | ) | $ | (271 | ) | $ | (4,651 | ) | $ | (1,534 | ) | ||
Loss per common shares: | ||||||||||||||
Basic | $ | (0.10 | ) | $ | (0.01 | ) | $ | (0.09 | ) | $ | (0.03 | ) | ||
Diluted | $ | (0.10 | ) | $ | (0.01 | ) | $ | (0.09 | ) | $ | (0.03 | ) | ||
Three months ended | ||||||||||||||
(dollars in thousands, except per share data) | March 31, | December 31, | September 21, | June 22, | ||||||||||
2013 | 2012 | 2012 | 2012 | |||||||||||
Net revenue | $ | 45,449 | $ | 46,939 | $ | 54,986 | $ | 68,178 | ||||||
Gross profit | 20,274 | 20,919 | 17,654 | 31,345 | ||||||||||
Net income (loss) | (4,444 | ) | (4,159 | ) | (4,231 | ) | 2,947 | |||||||
Net income (loss) attributable to RealD Inc. common stockholders | $ | (4,336 | ) | $ | (4,160 | ) | $ | (4,173 | ) | $ | 2,979 | |||
Earnings (Loss) per common share: | ||||||||||||||
Basic | $ | (0.09 | ) | $ | (0.08 | ) | $ | (0.08 | ) | $ | 0.05 | |||
Diluted | $ | (0.09 | ) | $ | (0.08 | ) | $ | (0.08 | ) | $ | 0.05 | |||
Fiscal year ended | ||||||||||||||
(number of calendar days) | March 31, | March 31, | Number of | Percentage | ||||||||||
2014 | 2013 | days change | change | |||||||||||
1st fiscal quarter | 91 | 91 | — | 0 | % | |||||||||
2nd fiscal quarter | 92 | 91 | 1 | 1.1 | % | |||||||||
3rd fiscal quarter | 92 | 101 | (9 | ) | (8.9 | )% | ||||||||
4th fiscal quarter | 90 | 90 | — | 0 | % | |||||||||
| | | | | | | | | | | | | | |
Total number of calendar days (1) | 365 | 373 | (8 | ) | (2.1 | )% | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | ||||||||||||||
Represents total number of calendar days difference between fiscal year 2014 and 2013 (also see "Accounting period" caption under Note 2, "Summary of significant accounting policies"). | ||||||||||||||
SCHEDULE_IIVALUATION_AND_QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | ' | |||||||||||||
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | ' | |||||||||||||
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||
Balance at | Additions | Other | Balance at end | |||||||||||
beginning of | charged to | Adjustments/ | of period | |||||||||||
period | cost and | Deductions(1) | ||||||||||||
expenses | ||||||||||||||
Allowance for doubtful accounts and customer credits: | ||||||||||||||
Year ended March 31, 2014 | $ | 2,649 | $ | 1,536 | $ | (952 | ) | $ | 3,233 | |||||
Year ended March 31, 2013 | $ | 4,224 | $ | — | $ | (1,575 | ) | $ | 2,649 | |||||
Year ended March 23, 2012 | $ | 6,803 | $ | — | $ | (2,579 | ) | $ | 4,224 | |||||
Deferred tax valuation allowance: | ||||||||||||||
Year ended March 31, 2014 | $ | 39,084 | $ | 7,091 | $ | — | $ | 46,175 | ||||||
Year ended March 31, 2013 | $ | 33,994 | $ | 5,090 | $ | — | $ | 39,084 | ||||||
Year ended March 23, 2012 | $ | 43,181 | $ | — | $ | (9,187 | ) | $ | 33,994 | |||||
-1 | ||||||||||||||
Other adjustments and deductions primarily consist of adjustments to deferred revenue and write-offs of amounts previously charged to the provision. | ||||||||||||||
Summary_of_significant_account1
Summary of significant accounting policies (Policies) | 12 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Summary of significant accounting policies | ' | ||||||||||
Accounting period | ' | ||||||||||
Accounting period | |||||||||||
On November 14, 2012, our Board of Directors approved a change in our accounting periods from the previous configuration of four 13-week periods for a total of 52 weeks to a calendar month end and calendar quarter end accounting period. This change in accounting period commenced in the third quarter ended December 31, 2012 of fiscal year 2013. As a result, the year ended March 31, 2014 is eight days shorter (2.1%) than the year ended March 31, 2013 and one day (0.0%) longer than the year ended March 23, 2012. | |||||||||||
Use of estimates | ' | ||||||||||
Use of estimates | |||||||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. | |||||||||||
Earnings (loss) per share of common stock | ' | ||||||||||
Earnings (loss) per share of common stock | |||||||||||
Basic income per share of common stock is computed by dividing the net income (loss) attributable to RealD common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing net income (loss) attributable to RealD Inc. common stockholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, shares to be purchased under our employee stock purchase plan and unvested restricted stock units. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. | |||||||||||
The calculation of the basic and diluted earnings (loss) per share of common stock for the years ended March 31, 2014, March 31, 2013 and March 23, 2012 was as follows: | |||||||||||
Year ended | |||||||||||
(in thousands, except per share data) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (11,210 | ) | $ | (9,887 | ) | $ | 37,025 | |||
Net (income) loss attributable to noncontrolling interest | (196 | ) | 197 | (156 | ) | ||||||
| | | | | | | | | | | |
Net income (loss) attributable to RealD Inc. common stockholders | $ | (11,406 | ) | $ | (9,690 | ) | $ | 36,869 | |||
Denominator: | |||||||||||
Weighted-average common shares outstanding (basic) | 49,504 | 52,345 | 54,352 | ||||||||
Effect of dilutive securities | — | — | 2,500 | ||||||||
| | | | | | | | | | | |
Weighted-average common shares outstanding (diluted) | 49,504 | 52,345 | 56,852 | ||||||||
Earnings (loss) per common share: | |||||||||||
Basic | $ | (0.23 | ) | $ | (0.19 | ) | $ | 0.68 | |||
Diluted | $ | (0.23 | ) | $ | (0.19 | ) | $ | 0.65 | |||
Due to the loss attributable to RealD Inc. common stockholders in the years ended March 31, 2014 and March 31, 2013, basic earnings (loss) per common share and diluted earnings (loss) per common share are the same as the effect of potentially dilutive securities would be anti-dilutive. | |||||||||||
The weighted-average number of anti-dilutive shares excluded from the calculation of diluted earnings (loss) per common share for the years ended March 31, 2014, March 31, 2013 and March 23, 2012 was as follows: | |||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
Options and warrants to purchase common stock | 9,299 | 8,441 | 3,899 | ||||||||
Conversion of convertible preferred stock | — | — | — | ||||||||
| | | | | | | | | | | |
Total | 9,299 | 8,441 | 3,899 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Fair value measurements | ' | ||||||||||
Fair value measurements | |||||||||||
Accounting Standards Codification Topic (ASC) 820-10, Fair Value Accounting (ASC 820), provides a common definition of fair value and establishes a framework to make the measurement of fair value in U.S. GAAP more consistent and comparable. This guidance also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value be classified and disclosed in the following three categories: | |||||||||||
• | |||||||||||
Level 1—Quoted prices for identical instruments in active markets. | |||||||||||
• | |||||||||||
Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. | |||||||||||
• | |||||||||||
Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |||||||||||
Our financial assets and liabilities, which include financial instruments as defined by ASC 820, include cash and cash equivalents, accounts receivable, accounts payable, long-term debt and derivatives. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable are a reasonable approximation of fair value due to the short maturities of these instruments. The carrying amount of long-term debt approximates fair value based on borrowing rates currently available to us. The carrying amount of our derivative instruments is recorded at fair value and is determined based on observable inputs that are corroborated by market data (Level 2). | |||||||||||
As of March 31, 2014 and March 31, 2013, the fair values of our derivative instruments that were carried at fair value on a recurring basis were not significant. | |||||||||||
Derivative instruments | ' | ||||||||||
Derivative instruments | |||||||||||
Our derivative instruments are recorded at fair value in other current assets or other current liabilities, respectively, in the consolidated balance sheets. Changes in fair value are reported as a component of other income or loss on our consolidated statements of operations. For all periods presented, none of our derivative instruments were designated as hedging instruments. We do not use foreign currency option or foreign exchange forward contracts for speculative or trading purposes. | |||||||||||
We purchase foreign currency forward contracts, generally with maturities of six months or less, to reduce the volatility of cash flows primarily related to forecasted payments and expenses denominated in certain foreign currencies. We had outstanding forward contracts based in British pound sterling and Euro with notional amounts totaling $0.4 million as of March 31, 2014. We had outstanding forward contracts based in British pound sterling, Euro and Canadian dollar with notional amounts totaling $5.8 million as of March 31, 2013. As of March 31, 2014 and March 31, 2013, the carrying amount of our foreign currency forward contracts was not significant and was classified as Level 2 fair value instruments, which was determined based on observable inputs that were corroborated by market data. For all periods presented, the net realized and unrealized gains and losses related to forward contracts were not significant. | |||||||||||
Marketable securities | ' | ||||||||||
Marketable securities | |||||||||||
We classify unrealized gains and losses on marketable securities reported as a component of accumulated other comprehensive income. As of March 31, 2014, March 31, 2013 and March 23, 2012, we had no marketable securities. | |||||||||||
The objectives of our investment policy are to preserve capital, provide sufficient liquidity to satisfy operating and investment purposes, and capture a market rate of return based on our investment policy parameters and market conditions. Our investment policy limits investments to certain types of debt and money market instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer. | |||||||||||
Cash equivalents | ' | ||||||||||
Cash equivalents | |||||||||||
We consider cash equivalents to be only those investments that are highly liquid, readily convertible into cash and which mature within three months from the date of purchase. | |||||||||||
Accounts receivable | ' | ||||||||||
Accounts receivable | |||||||||||
Accounts receivable consist of trade receivables, VAT receivable and other receivables. We extend credit to our customers, who are primarily in the movie production and exhibition businesses. We provide for the estimated accounts receivable that will not be collected. These estimates are based on an analysis of historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customers' payment terms and their economic condition. Collection of accounts receivable may be affected by changes in economic or other industry conditions and may, accordingly, impact our overall credit risk. The allowance for doubtful accounts and customer credits totaled $3.2 million and $2.6 million as of March 31, 2014 and March 31, 2013, respectively. | |||||||||||
Inventories and deferred costs-eyewear | ' | ||||||||||
Inventories and deferred costs-eyewear | |||||||||||
Inventories and deferred costs-eyewear represent eyewear and are substantially all finished goods. Inventories and deferred costs-eyewear are valued at the lower of cost (first-in, first-out method) or market value. At each balance sheet date, we evaluate ending inventories and deferred costs-eyewear for net realizable value. We also evaluate inventories for excess quantities and obsolescence. These evaluations include analyses of expected future average selling prices, projections of future demand and technology changes. In order to state inventories at the lower of cost or market, we maintain reserves against such inventories. If our analyses indicate that market is lower than cost, a write-down of inventories is recorded in cost of revenue in the period the loss is identified. As of March 31, 2014 and March 31, 2013, the inventory reserve as a result of our net realizable value analyses was $0.6 million and $0.4 million, respectively. | |||||||||||
Domestically, we provide our RealD eyewear free of charge to motion picture exhibitors and then receive a fee from the motion picture studios for the usage of that RealD eyewear by the motion picture exhibitors' consumers. | |||||||||||
For RealD eyewear located at a motion picture exhibitor, we do not believe that it is operationally practical to perform physical counts or request the motion picture exhibitor to perform physical counts and confirm quantities held to ensure that losses due to damage, destruction, and shrinkage are specifically recognized in the period incurred due to the number of domestic RealD-enabled screens and the related usage of RealD eyewear. We believe that the cost to monitor shrinkage or usage significantly outweighs the financial reporting benefits of using a specific identification methodology of expensing. We believe that utilizing a composite method of expensing RealD eyewear inventory costs provides a rational and reasonable approach to ensuring that shrinkage is provided for in the period incurred and that inventory costs are expensed in the periods that reasonably reflect the periods in which the related revenue is recognized. In doing so, we believe the following methodology reasonably and generally reflects periodic income or loss under these facts and circumstances: | |||||||||||
• | |||||||||||
For an estimated period of time following shipment to domestic motion picture exhibitors, no expense is recognized from the time of shipment until the delivery is made because eyewear is in transit and unused. | |||||||||||
• | |||||||||||
The inventory cost is expensed on a straight-line basis over an estimated usage period beginning with initial usage of the eyewear shipped. In estimating the expensing start date and related expense period, we consider various factors including, but not limited to, those relating to a 3D motion picture's opening release date, a 3D motion picture's expected release period, the number of currently playing 3D motion pictures and the motion picture exhibitor's buying and stocking patterns and practices. | |||||||||||
We believe that the expensing methodology described above rationally and reasonably approximates the period the related usage occurs resulting in our RealD eyewear product revenue. The expensing start date following the date of shipment is meant to approximate the date at which usage begins. Additionally, as the expense recognition period has been and is expected to continue to be short, we believe it adequately recognizes inventory impairments due to loss and damage on a timely basis. We further believe that exposures due to loss or damage, if any, are considered normal shrinkage and a necessary and expected cost to generate the revenue per 3D motion picture earned through RealD eyewear usage. We continue to monitor the reasonableness of this methodology to ensure that it approximates the period over which the related RealD eyewear product revenue is earned and realizable. Costs of RealD eyewear inventory that have shipped but have not yet been expensed per this methodology are reported as deferred costs-eyewear. | |||||||||||
Property and equipment, RealD Cinema Systems and digital projectors | ' | ||||||||||
Property and equipment, RealD Cinema Systems and digital projectors | |||||||||||
Property and equipment, RealD Cinema Systems and digital projectors are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. The major categories and related estimated useful lives are as follows: | |||||||||||
RealD Cinema Systems | 5 - 8 years | ||||||||||
Digital projectors—held for sale | 10 years | ||||||||||
Leasehold improvements | Shorter of useful life or lease | ||||||||||
Machinery and equipment | 2 - 7 years | ||||||||||
Furniture and fixtures | 3 - 5 years | ||||||||||
Computer equipment and software | 3 - 5 years | ||||||||||
Digital projectors—held for sale (digital projectors) also include digital servers, lenses and accessories. Upon installation at the customer location, we retain title to the RealD Cinema Systems which are held and used by our customers. The digital projectors are held for sale at either a specified date or upon occurrence of certain contingent events. Depreciation for RealD Cinema Systems and digital projectors is included in cost of revenue. | |||||||||||
We receive virtual print fees (VPFs) from third-party motion picture studios. VPFs represent amounts from third-party motion picture studios that are paid to us when a motion picture is played on one of our digital projectors. VPFs are deferred and deducted from the selling price of the digital projector. VPFs are recorded as a liability on the accompanying consolidated balance sheets and totaled $0.1 million and $0.3 million as of March 31, 2014 and March 31, 2013, respectively. | |||||||||||
Major enhancements and improvements are capitalized. Maintenance and repairs for cinema systems and digital projectors are charged to expense as incurred. Maintenance and repairs expense totaled $0.5 million, $0.9 million and $0.7 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | |||||||||||
Intangibles | ' | ||||||||||
Intangibles | |||||||||||
Intangibles are deemed to have finite lives and consist of acquired developed technologies (which are primarily patents) and are amortized over their estimated useful lives of 5 to 19 years (with a weighted average remaining amortization period of 5.8 years) using the straight-line method. | |||||||||||
Impairment of long-lived assets | ' | ||||||||||
Impairment of long-lived assets | |||||||||||
We review long-lived assets, such as property and equipment, cinema systems, digital projectors and intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Factors or circumstances that could indicate the occurrence of such events include current period operating or cash flow losses combined with a history of operating or cash flow losses, a projection or forecast that demonstrates continuing operating or cash flow losses, or incurring costs in excess of amounts originally expected to acquire or construct an asset. If the asset is not recoverable, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. | |||||||||||
During the year ended March 31, 2014, the impairment charged to cost of revenue for all impaired RealD Cinema Systems totaled $4.5 million. | |||||||||||
During the year ended March 31, 2013, we determined that a non-cancelable purchase commitment for certain cinema systems configurations in the aggregate amount of $3.5 million were not fully recoverable, primarily due to the initial investment costs which are expected to exceed the anticipated future cash flows for the related cinema systems. The impairment charged during the year ended March 31, 2013 for all impaired RealD Cinema Systems charged to cost of revenue was $8.0 million of the total $8.7 million impairment expense. | |||||||||||
During the year ended March 23, 2012, we determined that certain of our cinema systems were not recoverable and that the carrying value of the assets exceeded fair value, primarily due to the number of certain of our cinema system assets on hand, including related outstanding purchase commitments and the continuing shift in the mix in the deployment of cinema systems based on the type of digital projectors installed and theater configuration. The fair value was primarily determined by evaluating the discounted future cash flows expected to be generated from the cinema systems. The impairment charged during the year ended March 23, 2012 to cost of revenue for certain of the cinema systems totaled $10.3 million. | |||||||||||
Goodwill | ' | ||||||||||
Goodwill | |||||||||||
Goodwill is deemed to have an indefinite useful life and therefore is not amortized. We evaluate our goodwill for impairment using a two-step process that is performed at least annually during our fourth fiscal quarter, or whenever events or circumstances indicate that goodwill may be impaired. The first step is a comparison of the fair value of an internal reporting unit with its carrying amount, including goodwill. A reporting unit is an operating segment or one level below an operating segment. If the fair value of the reporting unit exceeds its carrying value, goodwill of the reporting unit is not considered impaired and the second step is unnecessary. If the carrying value of the reporting unit exceeds its fair value, the second step is performed to measure the amount of impairment by comparing the carrying amount of the goodwill to a determination of the implied value of the goodwill. If the carrying amount of goodwill is greater than the implied value, an impairment loss is recognized for the difference. We currently have one reporting unit in which goodwill resides and the reporting unit did not fail step one. | |||||||||||
Revenue recognition and revenue reductions | ' | ||||||||||
Revenue recognition and revenue reductions | |||||||||||
We derive substantially all of our revenue from the license of our RealD Cinema Systems and the product sale of our RealD eyewear. We evaluate revenue recognition for transactions using the criteria set forth by the SEC in Staff Accounting Bulletin No. 104, Revenue Recognition (SAB 104) and Accounting Standards Codification Topic 605, Revenue Recognition (ASC 605). The revenue recognition guidance states that revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller's price to the buyer is fixed or determinable and collectability is reasonably assured. We record revenue net of estimated allowances. | |||||||||||
License revenue | |||||||||||
License revenue is accounted for as an operating lease. License revenue is primarily derived under per-admission, periodic fixed fee, or per-motion picture basis with motion picture exhibitors. Amounts received up front, less estimated allowances, are deferred and recognized over the lease term using the straight-line method. Additional lease payments that are contingent upon future events outside our control, including those related to admission and usage, are recognized as revenues when the contingency is resolved and we have no more obligations to our customers specific to the contingent payment received. Certain of our license revenue from leasing our RealD Cinema Systems is earned upon admission by the motion picture exhibitor's consumers. We estimate and record licensing revenue related to motion picture exhibitor consumer admissions in the quarter in which the admission occurs, but only when reasonable estimates of such amounts can be made. We determine that there is persuasive evidence of an arrangement upon the execution of a license agreement or upon the receipt of a licensee's admissions report. Revenue is deemed fixed or determinable upon receipt of a licensee's admissions report or evidence of a RealD box office showing by licensee. We determine collectability based on an evaluation of the licensee's recent payment history. | |||||||||||
Product revenue | |||||||||||
We recognize product revenue, net of allowances, when title and risk of loss have passed and when there is persuasive evidence of an arrangement, the payment is fixed or determinable, and collectability of payment is reasonably assured. In the United States and Canada, certain of our product revenue from the sale of our RealD eyewear is earned upon admission and usage by the motion picture exhibitor's consumers. Our customers, however, do not report admission or usage information until after the admission and usage has occurred, and such information may be received subsequent to our fiscal period end. We estimate and record such product revenue in the period in which the admission and usage occurs, but only when reasonable estimates of such amounts can be made. | |||||||||||
Cost of revenue | ' | ||||||||||
Cost of revenue | |||||||||||
Cost of revenue principally consists of depreciation expense of our RealD Cinema Systems deployed at a motion picture exhibitor's premises, digital projector depreciation expenses, RealD eyewear costs (including shipping, handling and recycling costs), field service and support costs and occupancy costs. | |||||||||||
Shipping and handling costs | ' | ||||||||||
Shipping and handling costs | |||||||||||
Amounts billed to customers for shipping and handling costs are included in revenue. Shipping and handling costs that we incur consist primarily of packaging and transportation charges and are recorded in cost of revenue. Shipping and handling costs recognized in cost of revenue were $6.6 million, $7.9 million and $6.8 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | |||||||||||
Research and development costs | ' | ||||||||||
Research and development costs | |||||||||||
Research and development costs are expensed as incurred and are primarily comprised of personnel costs related to our research and development staff, depreciation and amortization of research and development assets, prototype and materials costs, the cost of third-party service providers supporting our research and development efforts and occupancy costs. | |||||||||||
Selling and marketing costs | ' | ||||||||||
Selling and marketing costs | |||||||||||
Selling and marketing costs are primarily comprised of personnel costs related to our selling and marketing staff, advertising costs, including promotional events and other brand building and product marketing expenses, corporate communications, certain professional fees, occupancy costs and travel expenses. | |||||||||||
Advertising costs are expensed as incurred. Advertising expenses were approximately $2.7 million, $3.7 million and $5.3 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | |||||||||||
General and administrative costs | ' | ||||||||||
General and administrative costs | |||||||||||
General and administrative costs principally consist of personnel costs related to our executive, legal, finance and human resources staff, professional fees including legal and accounting costs, occupancy costs and public company costs. Additionally, general and administrative costs include sales, use, goods and services tax and value added tax (collectively, the "transaction taxes") as well as property taxes. For our U.S. and some of our international cinema license and product revenue, we absorb the majority of the transaction taxes. | |||||||||||
Share-based compensation | ' | ||||||||||
Share-based compensation | |||||||||||
We account for share-based awards granted to employees and directors by recording compensation expense based on estimated fair values. We estimate the fair value of share-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statements of operations. Share-based awards are attributed to expense using the straight-line method over the vesting period. We determine the value of each option award that contains a market condition using a Monte Carlo Simulation valuation model, while all other option awards are valued using the Black-Scholes valuation model as permitted under ASC 718, Compensation—Stock Compensation. The assumptions used in calculating the fair value of share-based payment awards represent our best estimates. Our estimates of the fair values of share-based awards granted and the resulting amounts of share-based compensation recognized may be impacted by certain variables including stock price volatility, employee stock option exercise behaviors, additional stock option grants, modifications, estimates of forfeitures, and the related income tax impact. If any of the assumptions used in our valuation models significantly change, share-based compensation for future awards may differ materially from the awards granted previously. See Note 9, Share-based compensation. | |||||||||||
Foreign currency | ' | ||||||||||
Foreign currency | |||||||||||
Local currency transactions of our foreign operations that have the U.S. dollar as their functional currency are remeasured into U.S. dollars using current rates of exchange for monetary assets and liabilities and historical rates of exchange for nonmonetary assets and liabilities. Gains and losses from remeasurement of monetary assets and liabilities are included in other income (loss) in our statements of operations. | |||||||||||
The assets and liabilities of our foreign operations for which the functional currency is not the U.S. dollar are translated into U.S. dollars at exchange rates as of the balance sheet date, revenues and expenses are translated at average exchange rates for the period, and equity balances are translated at the historical rate. Resulting translation adjustments are included in other comprehensive loss, a component of equity (deficit). | |||||||||||
Net losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency and the net realized and unrealized gains and losses related to forward contracts totaled $0.6 million, $0.9 million and $0.5 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively, and are included in other income (loss). | |||||||||||
Income taxes | ' | ||||||||||
Income taxes | |||||||||||
Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities at year-end and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized. | |||||||||||
Accruals for uncertain tax positions are provided for in accordance with the authoritative guidance for accounting for uncertainty in income taxes (ASC 740). We may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The authoritative guidance for accounting for uncertainty in income taxes also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Our policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. | |||||||||||
Employee benefit plans | ' | ||||||||||
Employee benefit plans | |||||||||||
We have a voluntary 401(k) saving plans in which most U.S. employees are eligible to participate. Eligible employees may make contributions not to exceed the maximum statutory contribution amounts. We may match a percentage of each employee's contributions consistent with the provisions of the plan for which they are eligible. All employee and employer contributions fully vest immediately. Our contributions to these plans totaled $0.6 million, $0.6 million and $0.5 million for the years ended March 31, 2014, March 31, 2013 and March 23, 2012, respectively. | |||||||||||
Recent accounting pronouncements | ' | ||||||||||
Recent accounting pronouncements | |||||||||||
In July 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-10, "Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (Or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes". The objective of ASU 2013-10 is to provide for the inclusion of the Fed Funds Effective Swap Rate (OIS) as a U.S. benchmark interest rate for hedge accounting purposes, in addition to direct Treasury obligations of the U.S. government (UST) and, for practical reasons, the London Interbank Offered Rate (LIBOR) swap rate. ASU 2013-10 is effective prospectively for qualifying new or redesignated hedging relationship entered into on or after July 17, 2013. The adoption of ASU 2013-10 did not have a material impact on our consolidated financial statements. | |||||||||||
In July 2013, the FASB issued ASU 2013-11, "Income Taxes (Topic 740) Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists", which concludes that an unrecognized tax benefit should be presented as a reduction of a deferred tax asset when settlement in this manner is available under the tax law. The Company will adopt this amendment as of our 2015 fiscal year. The result of adoption may be to reclassify certain long term liabilities to long term deferred tax assets and the adoption will not result in a change to the tax provision. We do not expect the adoption of ASU 2013-11 to have a material impact on our consolidated financial statements. | |||||||||||
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)", effective for RealD as of April 1, 2017 (the first quarter of fiscal year 2018). The new standard will be implemented retrospectively with the Company choosing to either restate prior periods or recognize the cumulative effect. The new Topic 606 does not apply to lease contracts within the scope of Topic 840 leases. The objective of ASU 2014-09 is to provide guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. This ASU will supersede the revenue recognition requirements in Topic 605, "Revenue Recognition", and most industry-specific guidance. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today's guidance. | |||||||||||
Summary_of_significant_account2
Summary of significant accounting policies (Tables) | 12 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Summary of significant accounting policies | ' | ||||||||||
Schedule of calculation of the basic and diluted earnings (loss) per share of common stock | ' | ||||||||||
Year ended | |||||||||||
(in thousands, except per share data) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (11,210 | ) | $ | (9,887 | ) | $ | 37,025 | |||
Net (income) loss attributable to noncontrolling interest | (196 | ) | 197 | (156 | ) | ||||||
| | | | | | | | | | | |
Net income (loss) attributable to RealD Inc. common stockholders | $ | (11,406 | ) | $ | (9,690 | ) | $ | 36,869 | |||
Denominator: | |||||||||||
Weighted-average common shares outstanding (basic) | 49,504 | 52,345 | 54,352 | ||||||||
Effect of dilutive securities | — | — | 2,500 | ||||||||
| | | | | | | | | | | |
Weighted-average common shares outstanding (diluted) | 49,504 | 52,345 | 56,852 | ||||||||
Earnings (loss) per common share: | |||||||||||
Basic | $ | (0.23 | ) | $ | (0.19 | ) | $ | 0.68 | |||
Diluted | $ | (0.23 | ) | $ | (0.19 | ) | $ | 0.65 | |||
Schedule of weighted-average number of anti-dilutive shares excluded from the calculation of diluted earnings (loss) per common share | ' | ||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
Options and warrants to purchase common stock | 9,299 | 8,441 | 3,899 | ||||||||
Conversion of convertible preferred stock | — | — | — | ||||||||
| | | | | | | | | | | |
Total | 9,299 | 8,441 | 3,899 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of major categories and related estimated useful lives | ' | ||||||||||
RealD Cinema Systems | 5 - 8 years | ||||||||||
Digital projectors—held for sale | 10 years | ||||||||||
Leasehold improvements | Shorter of useful life or lease | ||||||||||
Machinery and equipment | 2 - 7 years | ||||||||||
Furniture and fixtures | 3 - 5 years | ||||||||||
Computer equipment and software | 3 - 5 years |
Property_and_equipment_RealD_C1
Property and equipment, RealD Cinema Systems and digital projectors (Tables) | 12 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Property and equipment, RealD Cinema Systems and digital projectors | ' | |||||||
Schedule of property and equipment of RealD Cinema Systems and digital projectors | ' | |||||||
(in thousands) | March 31, | March 31, | ||||||
2014 | 2013 | |||||||
RealD Cinema Systems | $ | 205,416 | $ | 194,527 | ||||
Digital projectors—held for sale | 216 | 1,634 | ||||||
Leasehold improvements | 16,935 | 14,442 | ||||||
Machinery and equipment | 4,753 | 6,198 | ||||||
Furniture and fixtures | 1,272 | 1,122 | ||||||
Computer equipment and software | 9,197 | 7,628 | ||||||
Construction in process | 1,554 | 2,637 | ||||||
| | | | | | | | |
Total | $ | 239,343 | $ | 228,188 | ||||
Less accumulated depreciation | (110,060 | ) | (77,079 | ) | ||||
| | | | | | | | |
Property and equipment, RealD Cinema Systems and digital projectors, net | $ | 129,283 | $ | 151,109 | ||||
| | | | | | | | |
| | | | | | | | |
Goodwill_and_intangible_assets1
Goodwill and intangible assets (Tables) | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Goodwill and intangible assets | ' | |||||||||||||
Schedule of components of goodwill and intangible assets | ' | |||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||||
(in thousands) | Gross | Accumulated | Gross | Accumulated | ||||||||||
amount | amortization | amount | amortization | |||||||||||
Acquired developed technologies | $ | 9,324 | $ | 3,170 | $ | 9,324 | $ | 1,907 | ||||||
Goodwill | 10,657 | — | 10,657 | — | ||||||||||
| | | | | | | | | | | | | | |
Total | $ | 19,981 | $ | 3,170 | $ | 19,981 | $ | 1,907 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of estimated remaining amortization expense | ' | |||||||||||||
At March 31, 2014, the remaining amortization expense is estimated to be as follows (in thousands): | ||||||||||||||
Fiscal year 2015 | $ | 1,269 | ||||||||||||
Fiscal year 2016 | 1,272 | |||||||||||||
Fiscal year 2017 | 1,269 | |||||||||||||
Fiscal year 2018 | 1,256 | |||||||||||||
Fiscal year 2019 | 464 | |||||||||||||
Thereafter | 624 | |||||||||||||
| | | | | ||||||||||
Total | $ | 6,154 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Accrued_expenses_and_other_lia1
Accrued expenses and other liabilities (Tables) | 12 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Accrued expenses and other liabilities | ' | ||||||||||
Schedule of accrued expenses and other liabilities | ' | ||||||||||
(in thousands) | March 31, | March 31, | |||||||||
2014 | 2013 | ||||||||||
Payroll and compensation | $ | 5,070 | $ | 4,530 | |||||||
Sales, use taxes and other taxes | 6,582 | 6,960 | |||||||||
Professional fees | 1,484 | 1,005 | |||||||||
Refundable deposits | 108 | 1,227 | |||||||||
Marketing | 567 | 545 | |||||||||
RealD Cinema system installation fees | 4,134 | 3,303 | |||||||||
Purchase obligations | — | 3,450 | |||||||||
Other | 3,951 | 3,993 | |||||||||
| | | | | | | | ||||
Total | $ | 21,896 | $ | 25,013 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Summary of actual charges resulting from implementation of the cost reduction plan | ' | ||||||||||
Fiscal year ended March 31, 2014 | |||||||||||
(in thousands) | Personnel | Leasehold | Total | ||||||||
Cost of revenue | $ | 835 | $ | 13 | $ | 848 | |||||
Research and development | 757 | — | 757 | ||||||||
Selling and marketing | 1,830 | — | 1,830 | ||||||||
General and administrative | 1,206 | 77 | 1,283 | ||||||||
| | | | | | | | | | | |
Total FY2014 Actual | $ | 4,628 | $ | 90 | $ | 4,718 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ||||||||||
Cost reduction plan liabilities | |||||||||||
(in thousands) | Personnel | Leasehold | Total | ||||||||
Cost reduction plan liabilities as of April 1, 2013 | $ | — | $ | — | $ | — | |||||
Charges | 4,628 | 90 | 4,718 | ||||||||
(Payments) | (3,212 | ) | (90 | ) | (3,302 | ) | |||||
| | | | | | | | | | | |
Cost reduction plan liabilities as of March 31, 2014 | $ | 1,416 | $ | — | $ | 1,416 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Borrowings_Tables
Borrowings (Tables) | 12 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Borrowings | ' | |||||||
Schedule of the current and non-current portions of the Credit Agreement | ' | |||||||
March 31, | March 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Current portion of Credit Agreement | $ | 12,500 | $ | 1,042 | ||||
Credit Agreement, net of current portion | 23,750 | 46,458 | ||||||
| | | | | | | | |
Total Credit Agreement | $ | 36,250 | $ | 47,500 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of future minimum Credit Agreement obligations | ' | |||||||
At March 31, 2014, our future minimum Credit Agreement obligations were as follows: | ||||||||
Fiscal year 2015 | $ | 12,500 | ||||||
Fiscal year 2016 | 17,500 | |||||||
Fiscal year 2017 | 6,250 | |||||||
| | | | | ||||
Total | $ | 36,250 | ||||||
| | | | | ||||
| | | | | ||||
Commitments_and_contingencies_
Commitments and contingencies (Tables) | 12 Months Ended | ||||
Mar. 31, 2014 | |||||
Commitments and contingencies | ' | ||||
Schedule of future minimum lease obligations | ' | ||||
At March 31, 2014, our future minimum lease obligations were as follows (in thousands): | |||||
Fiscal year 2015 | $ | 7,260 | |||
Fiscal year 2016 | 4,189 | ||||
Fiscal year 2017 | 3,966 | ||||
Fiscal year 2018 | 3,969 | ||||
Fiscal year 2019 | 3,881 | ||||
Thereafter | 14,147 | ||||
| | | | | |
Total | $ | 37,412 | |||
| | | | | |
| | | | | |
Equity_Tables
Equity (Tables) | 12 Months Ended | ||||
Mar. 31, 2014 | |||||
Equity | ' | ||||
Schedule of reserve of common stock for future issuances | ' | ||||
(in thousands) | |||||
Restricted stock units | 716 | ||||
Performance stock options | 1,354 | ||||
Stock option plan: | |||||
Outstanding | 7,811 | ||||
Reserved for future issuance | 4,300 | ||||
| | | | | |
Total | 14,181 | ||||
| | | | | |
| | | | | |
Sharebased_compensation_Tables
Share-based compensation (Tables) | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Share-based compensation | ' | |||||||||||||
Schedule of components of stock-based compensation expense recognized in our consolidated statements of operations | ' | |||||||||||||
Year ended | ||||||||||||||
(in thousands) | March 31, | March 31, | March 23, | |||||||||||
2014 | 2013 | 2012 | ||||||||||||
Cost of revenue | $ | 865 | $ | 807 | $ | 458 | ||||||||
Research and development | 2,708 | 2,185 | 2,604 | |||||||||||
Selling and marketing | 5,543 | 5,258 | 4,776 | |||||||||||
General and administrative | 8,625 | 10,224 | 7,906 | |||||||||||
| | | | | | | | | | | ||||
Total | $ | 17,741 | $ | 18,474 | $ | 15,744 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Share-based compensation | ' | |||||||||||||
Summary of restricted stock units | ' | |||||||||||||
(in thousands, except grant | Units | Weighted- | ||||||||||||
date fair value data) | average | |||||||||||||
grant date | ||||||||||||||
fair value | ||||||||||||||
Nonvested at March 31, 2013 | 181 | $ | 14.83 | |||||||||||
Granted | 595 | 12.29 | ||||||||||||
Vested | (205 | ) | 11.98 | |||||||||||
Forfeited | (92 | ) | 13.58 | |||||||||||
| | | | | | | | |||||||
Nonvested at March 31, 2014 | 479 | $ | 13.13 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Stock options | ' | |||||||||||||
Share-based compensation | ' | |||||||||||||
Summary of stock option activity | ' | |||||||||||||
(in thousands, except exercise price | Options | Weighted- | Weighted- | Aggregate | ||||||||||
data and contractual term data) | average | average | intrinsic | |||||||||||
exercise | remaining | value | ||||||||||||
price | contractual | |||||||||||||
term (years) | ||||||||||||||
Outstanding at March 31, 2013 | 9,082 | $ | 12.59 | |||||||||||
| | | | | | | | | | | | | | |
Granted | 716 | 12.88 | ||||||||||||
Exercised | (624 | ) | 3.36 | |||||||||||
Forfeited or expired | (1,363 | ) | 13.32 | |||||||||||
| | | | | | | | | | | | | | |
Outstanding at March 31, 2014 | 7,811 | $ | 13.11 | 6.2 | $ | 13,707 | ||||||||
| | | | | | | | | | | | | | |
Exercisable at March 31, 2014 | 6,027 | $ | 12.77 | 5.6 | $ | 12,998 | ||||||||
| | | | | | | | | | | | | | |
Vested or expected to vest | 7,687 | $ | 13.08 | 6.6 | $ | 13,614 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of weighted-average assumptions to determine weighted-average grant date fair values | ' | |||||||||||||
Year ended | ||||||||||||||
March 31, | March 31, | March 23, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Fair value of stock options granted | $ | 7.2 | $ | 6.2 | $ | 11.39 | ||||||||
Expected volatility | 60 | % | 60 | % | 58 | % | ||||||||
Expected term (years) | 6 | 6 | 6 | |||||||||||
Risk-free rate | 1.4 | % | 1 | % | 2 | % | ||||||||
Expected dividends | — | — | — | |||||||||||
Performance stock option | ' | |||||||||||||
Share-based compensation | ' | |||||||||||||
Summary of stock option activity | ' | |||||||||||||
(in thousands, except exercise price | Options | Weighted- | Weighted- | |||||||||||
data and contractual term data) | average | average | ||||||||||||
exercise | remaining | |||||||||||||
price | contractual | |||||||||||||
term (years) | ||||||||||||||
Outstanding at March 31, 2013 | 589 | $ | 16 | 7.3 | ||||||||||
Granted | 450 | 14.45 | 9.2 | |||||||||||
Exercised | — | — | ||||||||||||
Forfeited or expired | (353 | ) | 16 | |||||||||||
| | | | | | | | | | | ||||
Outstanding at March 31, 2014 | 686 | $ | 14.98 | 8.2 | ||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Income_taxes_Tables
Income taxes (Tables) | 12 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Income taxes | ' | ||||||||||
Schedule of income tax provision from continuing operations | ' | ||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
Current income tax provision: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | 132 | 103 | 119 | ||||||||
Foreign | 6,128 | 5,202 | 4,948 | ||||||||
| | | | | | | | | | | |
6,260 | 5,305 | 5,067 | |||||||||
Deferred income tax benefit: | |||||||||||
Federal | — | — | — | ||||||||
State | — | — | — | ||||||||
Foreign | (143 | ) | (241 | ) | 38 | ||||||
| | | | | | | | | | | |
Total income tax provision from continuing operations | $ | 6,117 | $ | 5,064 | $ | 5,105 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of income (loss) from continuing operations before income taxes | ' | ||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
United States | (11,224 | ) | (6,963 | ) | 37,600 | ||||||
Foreign | 6,131 | 2,140 | 4,530 | ||||||||
| | | | | | | | | | | |
Total | (5,093 | ) | (4,823 | ) | 42,130 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of components of deferred tax balances | ' | ||||||||||
(in thousands) | March 31, | March 31, | |||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | 24,971 | 26,359 | |||||||||
Deferred revenues | 2,708 | 4,403 | |||||||||
Accruals, reserves and allowances | 7,698 | 6,771 | |||||||||
Stock compensation | 15,796 | 13,220 | |||||||||
Intangible assets | — | 16 | |||||||||
Foreign tax credit carryovers | 15,181 | 11,571 | |||||||||
Partnership interest | 44 | ||||||||||
Other | 1,445 | 1,255 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 67,843 | 63,595 | |||||||||
Deferred tax liabilities | |||||||||||
Fixed assets | (15,020 | ) | (18,757 | ) | |||||||
Intangible assets | (118 | ) | — | ||||||||
Partnership interest | — | (113 | ) | ||||||||
Unbilled receivables | (5,821 | ) | (5,385 | ) | |||||||
Other | (426 | ) | (115 | ) | |||||||
| | | | | | | | ||||
Total Deferred tax liabilities | (21,385 | ) | (24,370 | ) | |||||||
Valuation allowance | (46,175 | ) | (39,084 | ) | |||||||
| | | | | | | | ||||
Net deferred tax assets | 283 | 141 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of increase in valuation allowance through the operating statement | ' | ||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | |||||||||
2014 | 2013 | ||||||||||
Through continuing operation | $ | 7,091 | $ | 5,090 | |||||||
| | | | | | | | ||||
Increase in valuation allowance | 7,091 | 5,090 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of differences between the income tax provision from continuing operations and taxes computed by applying the U.S. statutory federal income tax rate to the pretax income (loss) | ' | ||||||||||
Year ended | |||||||||||
March 31, | March 31, | March 23, | |||||||||
2014 | 2013 | 2012 | |||||||||
Federal tax at statutory rate | 34 | % | 34 | % | 34 | % | |||||
State tax, net of federal benefit | (1.4 | )% | (7.7 | )% | 1.6 | % | |||||
Foreign tax rate differential | 8.6 | % | 2.9 | % | 0.5 | % | |||||
LLC income minority interest not taxed | 1.4 | % | (1.3 | )% | (0.1 | )% | |||||
Revaluation of deferred taxes due to changes in effective income tax rates | (0.8 | )% | 3.8 | % | (1.4 | )% | |||||
Research tax credits | (0.9 | )% | 0 | % | 0 | % | |||||
Permanent differences and other | 15.2 | % | 3.7 | % | (0.7 | )% | |||||
Stock compensation | (37.0 | )% | (34.9 | )% | 0 | % | |||||
Change in valuation allowance | (139.0 | )% | (105.5 | )% | (21.8 | )% | |||||
| | | | | | | | | | | |
Total tax benefit | (119.9 | )% | (105.0 | )% | 12.1 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Summary of activity related to unrecognized tax benefits | ' | ||||||||||
The following table summarizes the activity related to our unrecognized tax benefits (in thousands): | |||||||||||
Balance as of March 31, 2013 | $ | 346 | |||||||||
Increases related to prior year tax positions | — | ||||||||||
Increase related to current year tax positions | — | ||||||||||
Expiration of the statute of limitations for the assessment of taxes | — | ||||||||||
Settlements | — | ||||||||||
| | | | | |||||||
Balance as of March 31, 2014 | $ | 346 | |||||||||
| | | | | |||||||
| | | | | |||||||
Segment_and_geographic_informa1
Segment and geographic information (Tables) | 12 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Segment and geographic information | ' | ||||||||||
Schedule of revenue by geographic region, as determined based on the location of customers or the anticipated destination of use | ' | ||||||||||
Year ended | |||||||||||
(in thousands) | March 31, | March 31, | March 23, | ||||||||
2014 | 2013 | 2012 | |||||||||
Domestic (United States and Canada) | $ | 96,159 | $ | 106,979 | $ | 126,151 | |||||
International | 103,075 | 108,573 | 120,477 | ||||||||
| | | | | | | | | | | |
Total revenues | $ | 199,234 | $ | 215,552 | $ | 246,628 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of long-lived tangible assets, net of accumulated depreciation by geographic region | ' | ||||||||||
(in thousands) | March 31, | March 31, | |||||||||
2014 | 2013 | ||||||||||
Domestic (United States and Canada) | $ | 105,708 | $ | 101,438 | |||||||
International | 23,575 | 49,671 | |||||||||
| | | | | | | | ||||
Total long-lived tangible assets | $ | 129,283 | $ | 151,109 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Quarterly_financial_data_unaud1
Quarterly financial data (unaudited) (Tables) | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Quarterly financial data (unaudited) | ' | |||||||||||||
Schedule of quarterly financial data | ' | |||||||||||||
Three months ended | ||||||||||||||
(dollars in thousands, except per share data) | March 31, | December 31, | September 30, | June 30, | ||||||||||
2014 | 2013 | 2013 | 2013 | |||||||||||
Net revenue | $ | 40,648 | $ | 55,438 | $ | 43,929 | $ | 59,219 | ||||||
Gross profit | 19,902 | 27,270 | 19,906 | 28,181 | ||||||||||
Net loss | (4,855 | ) | (155 | ) | (4,664 | ) | (1,536 | ) | ||||||
Net loss attributable to RealD Inc. common stockholders | $ | (4,950 | ) | $ | (271 | ) | $ | (4,651 | ) | $ | (1,534 | ) | ||
Loss per common shares: | ||||||||||||||
Basic | $ | (0.10 | ) | $ | (0.01 | ) | $ | (0.09 | ) | $ | (0.03 | ) | ||
Diluted | $ | (0.10 | ) | $ | (0.01 | ) | $ | (0.09 | ) | $ | (0.03 | ) | ||
Three months ended | ||||||||||||||
(dollars in thousands, except per share data) | March 31, | December 31, | September 21, | June 22, | ||||||||||
2013 | 2012 | 2012 | 2012 | |||||||||||
Net revenue | $ | 45,449 | $ | 46,939 | $ | 54,986 | $ | 68,178 | ||||||
Gross profit | 20,274 | 20,919 | 17,654 | 31,345 | ||||||||||
Net income (loss) | (4,444 | ) | (4,159 | ) | (4,231 | ) | 2,947 | |||||||
Net income (loss) attributable to RealD Inc. common stockholders | $ | (4,336 | ) | $ | (4,160 | ) | $ | (4,173 | ) | $ | 2,979 | |||
Earnings (Loss) per common share: | ||||||||||||||
Basic | $ | (0.09 | ) | $ | (0.08 | ) | $ | (0.08 | ) | $ | 0.05 | |||
Diluted | $ | (0.09 | ) | $ | (0.08 | ) | $ | (0.08 | ) | $ | 0.05 | |||
Summary of changes in reporting period | ' | |||||||||||||
Fiscal year ended | ||||||||||||||
(number of calendar days) | March 31, | March 31, | Number of | Percentage | ||||||||||
2014 | 2013 | days change | change | |||||||||||
1st fiscal quarter | 91 | 91 | — | 0 | % | |||||||||
2nd fiscal quarter | 92 | 91 | 1 | 1.1 | % | |||||||||
3rd fiscal quarter | 92 | 101 | (9 | ) | (8.9 | )% | ||||||||
4th fiscal quarter | 90 | 90 | — | 0 | % | |||||||||
| | | | | | | | | | | | | | |
Total number of calendar days (1) | 365 | 373 | (8 | ) | (2.1 | )% | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | ||||||||||||||
Represents total number of calendar days difference between fiscal year 2014 and 2013 (also see "Accounting period" caption under Note 2, "Summary of significant accounting policies"). | ||||||||||||||
Summary_of_significant_account3
Summary of significant accounting policies (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Share data in Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 21, 2012 | Jun. 22, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
item | item | ||||||||||
Accounting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of period in an accounting period | 4 | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' |
Length of quarter | ' | ' | ' | ' | ' | ' | ' | ' | '91 days | ' | ' |
Length of fiscal year | ' | ' | ' | ' | ' | ' | ' | ' | '364 days | ' | ' |
Number of days by which period of current fiscal year is short as compared to previous fiscal year 2013 | ' | ' | ' | ' | ' | ' | ' | ' | '8 days | ' | ' |
Percentage by which period of current fiscal year is short as compared to previous fiscal year 2013 | ' | ' | ' | ' | ' | ' | ' | ' | 2.10% | ' | ' |
Number of days by which period of current fiscal year is long as compared to previous fiscal year 2012 | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 day | ' |
Percentage by which period of current fiscal year is long as compared to previous fiscal year 2012 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' |
Numerator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ($4,855,000) | ($155,000) | ($4,664,000) | ($1,536,000) | ($4,444,000) | ($4,159,000) | ($4,231,000) | $2,947,000 | ($11,210,000) | ($9,887,000) | $37,025,000 |
Net (income) loss attributable to noncontrolling interest | ' | ' | ' | ' | ' | ' | ' | ' | -196,000 | 197,000 | -156,000 |
Net income (loss) attributable to RealD Inc. common stockholders | ($4,950,000) | ($271,000) | ($4,651,000) | ($1,534,000) | ($4,336,000) | ($4,160,000) | ($4,173,000) | $2,979,000 | ($11,406,000) | ($9,690,000) | $36,869,000 |
Denominator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average common shares outstanding (basic) | ' | ' | ' | ' | ' | ' | ' | ' | 49,504 | 52,345 | 54,352 |
Effect of dilutive securities (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500 |
Weighted-average common shares outstanding (diluted) | ' | ' | ' | ' | ' | ' | ' | ' | 49,504 | 52,345 | 56,852 |
Earnings (loss) per common share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | ($0.10) | ($0.01) | ($0.09) | ($0.03) | ($0.09) | ($0.08) | ($0.08) | $0.05 | ($0.23) | ($0.19) | $0.68 |
Diluted (in dollars per share) | ($0.10) | ($0.01) | ($0.09) | ($0.03) | ($0.09) | ($0.08) | ($0.08) | $0.05 | ($0.23) | ($0.19) | $0.65 |
Earnings (loss) per share of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average number of anti-dilutive shares excluded from the calculation of diluted earnings (loss) per common share | ' | ' | ' | ' | ' | ' | ' | ' | 9,299 | 8,441 | 3,899 |
Options and warrants to purchase common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings (loss) per share of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average number of anti-dilutive shares excluded from the calculation of diluted earnings (loss) per common share | ' | ' | ' | ' | ' | ' | ' | ' | 9,299 | 8,441 | 3,899 |
Summary_of_significant_account4
Summary of significant accounting policies (Details 2) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 |
In Millions, unless otherwise specified | Designated as hedging instrument | Foreign currency forward contract | Foreign currency forward contract | |||
item | Not designated as hedging instrument | Not designated as hedging instrument | ||||
Level 2 | Level 2 | |||||
Derivative instruments | ' | ' | ' | ' | ' | ' |
Number of derivative instruments | ' | ' | ' | 0 | ' | ' |
Foreign currency forward contracts, maturity period | ' | ' | ' | ' | '6 months | ' |
Foreign currency forward contracts, notional amount | ' | ' | ' | ' | $0.40 | $5.80 |
Marketable securities | ' | ' | ' | ' | ' | ' |
Marketable securities | 0 | 0 | 0 | ' | ' | ' |
Accounts receivable: value added tax (VAT) receivables | ' | ' | ' | ' | ' | ' |
Allowance for doubtful accounts and customer credits | 3.2 | 2.6 | ' | ' | ' | ' |
Inventories and deferred costs-eyewear | ' | ' | ' | ' | ' | ' |
Inventory reserve | $0.60 | $0.40 | ' | ' | ' | ' |
Summary_of_significant_account5
Summary of significant accounting policies (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
VPFs recorded as a liability | $0.10 | $0.30 | ' |
Maintenance and repairs for cinema systems and digital projectors | $0.50 | $0.90 | $0.70 |
RealD Cinema Systems | Minimum | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Estimated useful lives | '5 years | ' | ' |
RealD Cinema Systems | Maximum | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Estimated useful lives | '8 years | ' | ' |
Digital projectors - held for sale | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Estimated useful lives | '10 years | ' | ' |
Machinery and equipment | Minimum | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Estimated useful lives | '2 years | ' | ' |
Machinery and equipment | Maximum | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Estimated useful lives | '7 years | ' | ' |
Furniture and fixtures | Minimum | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Estimated useful lives | '3 years | ' | ' |
Furniture and fixtures | Maximum | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Estimated useful lives | '5 years | ' | ' |
Computer equipment and software | Minimum | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Estimated useful lives | '3 years | ' | ' |
Computer equipment and software | Maximum | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Estimated useful lives | '5 years | ' | ' |
Summary_of_significant_account6
Summary of significant accounting policies (Details 4) | 12 Months Ended |
Mar. 31, 2014 | |
Minimum | ' |
Intangibles | ' |
Estimated useful lives | '5 years |
Maximum | ' |
Intangibles | ' |
Estimated useful lives | '19 years |
Weighted average | ' |
Intangibles | ' |
Estimated useful lives | '5 years 9 months 18 days |
Summary_of_significant_account7
Summary of significant accounting policies (Details 5) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
item | |||
Impairment of long-lived assets | ' | ' | ' |
Impairment charges | $4.50 | $8.70 | $10.30 |
Goodwill | ' | ' | ' |
Number of reporting units | 1 | ' | ' |
Shipping and handling costs | ' | ' | ' |
Shipping and handling costs | 6.6 | 7.9 | 6.8 |
Selling and marketing costs | ' | ' | ' |
Advertising expenses | 2.7 | 3.7 | 5.3 |
Foreign currency | ' | ' | ' |
Net realized and unrealized gains and losses related to forward contracts | 0.6 | 0.9 | 0.5 |
Employee benefit plans | ' | ' | ' |
Contributions to voluntary 401(k) savings plans | 0.6 | 0.6 | 0.5 |
Cinema systems configurations under non-cancellable purchase commitment | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' |
Aggregate amount of non-cancellable purchase agreement for certain cinema systems configurations | ' | 3.5 | ' |
Non-recoverable cinema systems | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' |
Impairment charges | ' | ' | 10.3 |
RealD Cinema Systems | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' |
Impairment charges | $4.50 | $8 | ' |
Property_and_equipment_RealD_C2
Property and equipment, RealD Cinema Systems and digital projectors (Details) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 | |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | $239,343,000 | $228,188,000 | ' |
Less accumulated depreciation | -110,060,000 | -77,079,000 | ' |
Property and equipment, RealD Cinema Systems and digital projectors, net | 129,283,000 | 151,109,000 | ' |
Depreciation expense | 39,000,000 | 32,700,000 | 28,100,000 |
Cash received from motion picture exhibitor customers for the sale of digital projectors | 300,000 | 2,500,000 | 4,000,000 |
Accounts receivable from motion picture exhibitor customers from the sale of digital projectors | ' | ' | 2,474,000 |
Gain on sale of digital projectors | ' | ' | 1,742,000 |
Impairment expense | 4,500,000 | 8,700,000 | 10,300,000 |
Cinema systems configurations under non-cancellable purchase commitment | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Aggregate amount of non-cancellable purchase agreement for certain cinema systems configurations | ' | 3,500,000 | ' |
RealD Cinema Systems | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 205,416,000 | 194,527,000 | ' |
Digital projectors - held for sale | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 216,000 | 1,634,000 | ' |
Leasehold improvements | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 16,935,000 | 14,442,000 | ' |
Machinery and equipment | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 4,753,000 | 6,198,000 | ' |
Furniture and fixtures | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 1,272,000 | 1,122,000 | ' |
Computer equipment and software | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 9,197,000 | 7,628,000 | ' |
Construction in process | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | $1,554,000 | $2,637,000 | ' |
Goodwill_and_intangible_assets2
Goodwill and intangible assets (Details) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 | |
Goodwill and intangible assets | ' | ' | ' |
Gross amount of acquired developed technologies | $9,324,000 | $9,324,000 | ' |
Accumulated amortization of acquired developed technologies | 3,170,000 | 1,907,000 | ' |
Goodwill | 10,657,000 | 10,657,000 | ' |
Total | 19,981,000 | 19,981,000 | ' |
Amortization expense | 1,300,000 | 400,000 | 200,000 |
Goodwill and intangible assets | ' | ' | ' |
Weighted average amortization period | '5 years 9 months 18 days | ' | ' |
Minimum | ' | ' | ' |
Goodwill and intangible assets | ' | ' | ' |
Estimated useful lives | '5 years | ' | ' |
Estimated amortization expense | ' | ' | ' |
Fiscal year 2015 | 1,269,000 | ' | ' |
Fiscal year 2016 | 1,272,000 | ' | ' |
Fiscal year 2017 | 1,269,000 | ' | ' |
Fiscal year 2018 | 1,256,000 | ' | ' |
Fiscal year 2019 | 464,000 | ' | ' |
Thereafter | 624,000 | ' | ' |
Total | 6,154,000 | ' | ' |
Maximum | ' | ' | ' |
Goodwill and intangible assets | ' | ' | ' |
Estimated useful lives | '19 years | ' | ' |
2D-to-3D conversion patents | ' | ' | ' |
Goodwill and intangible assets | ' | ' | ' |
Assets purchased | $6,100,000 | ' | ' |
Accrued_expenses_and_other_lia2
Accrued expenses and other liabilities (Details) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued expenses and other liabilities | ' | ' |
Payroll and compensation | $5,070 | $4,530 |
Sales, use taxes and other taxes | 6,582 | 6,960 |
Professional fees | 1,484 | 1,005 |
Refundable deposits | 108 | 1,227 |
Marketing | 567 | 545 |
RealD Cinema system installation fees | 4,134 | 3,303 |
Purchase obligations | ' | 3,450 |
Other | 3,951 | 3,993 |
Total | $21,896 | $25,013 |
Accrued_expenses_and_other_lia3
Accrued expenses and other liabilities (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Cost reduction plan | ' | ' | ' |
Charges related to staff reduced | $4,628 | ' | ' |
Charges related to manufacturing facilities not in operations | 90 | ' | ' |
Total charges associated with the cost reduction plan | 4,718 | ' | ' |
Charges resulting from implementation of the cost reduction plan | ' | ' | ' |
Personnel | 4,628 | ' | ' |
Leasehold | 90 | ' | ' |
Total | 4,718 | ' | ' |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ' | ' |
Cost reduction plan liabilities | 1,416 | ' | ' |
Charges | 4,718 | ' | ' |
(Payments) | -3,302 | ' | ' |
Impairment | 4,522 | 8,679 | 10,269 |
Leasehold improvements | ' | ' | ' |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ' | ' |
Impairment | 100 | ' | ' |
Cost of revenue | ' | ' | ' |
Cost reduction plan | ' | ' | ' |
Charges related to staff reduced | 835 | ' | ' |
Charges related to manufacturing facilities not in operations | 13 | ' | ' |
Total charges associated with the cost reduction plan | 848 | ' | ' |
Charges resulting from implementation of the cost reduction plan | ' | ' | ' |
Personnel | 835 | ' | ' |
Leasehold | 13 | ' | ' |
Total | 848 | ' | ' |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ' | ' |
Charges | 848 | ' | ' |
Research and development | ' | ' | ' |
Cost reduction plan | ' | ' | ' |
Charges related to staff reduced | 757 | ' | ' |
Total charges associated with the cost reduction plan | 757 | ' | ' |
Charges resulting from implementation of the cost reduction plan | ' | ' | ' |
Personnel | 757 | ' | ' |
Total | 757 | ' | ' |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ' | ' |
Charges | 757 | ' | ' |
Selling and marketing | ' | ' | ' |
Cost reduction plan | ' | ' | ' |
Charges related to staff reduced | 1,830 | ' | ' |
Total charges associated with the cost reduction plan | 1,830 | ' | ' |
Charges resulting from implementation of the cost reduction plan | ' | ' | ' |
Personnel | 1,830 | ' | ' |
Total | 1,830 | ' | ' |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ' | ' |
Charges | 1,830 | ' | ' |
General and administrative | ' | ' | ' |
Cost reduction plan | ' | ' | ' |
Charges related to staff reduced | 1,206 | ' | ' |
Charges related to manufacturing facilities not in operations | 77 | ' | ' |
Total charges associated with the cost reduction plan | 1,283 | ' | ' |
Charges resulting from implementation of the cost reduction plan | ' | ' | ' |
Personnel | 1,206 | ' | ' |
Leasehold | 77 | ' | ' |
Total | 1,283 | ' | ' |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ' | ' |
Charges | 1,283 | ' | ' |
Employee severance | ' | ' | ' |
Cost reduction plan | ' | ' | ' |
Total charges associated with the cost reduction plan | 4,628 | ' | ' |
Charges resulting from implementation of the cost reduction plan | ' | ' | ' |
Total | 4,628 | ' | ' |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ' | ' |
Cost reduction plan liabilities | 1,416 | ' | ' |
Charges | 4,628 | ' | ' |
(Payments) | -3,212 | ' | ' |
Lease | ' | ' | ' |
Cost reduction plan | ' | ' | ' |
Total charges associated with the cost reduction plan | 90 | ' | ' |
Charges resulting from implementation of the cost reduction plan | ' | ' | ' |
Total | 90 | ' | ' |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ' | ' |
Charges | 90 | ' | ' |
(Payments) | -90 | ' | ' |
Estimated | ' | ' | ' |
Cost reduction plan | ' | ' | ' |
Total charges associated with the cost reduction plan | 5,900 | ' | ' |
Charges resulting from implementation of the cost reduction plan | ' | ' | ' |
Total | 5,900 | ' | ' |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ' | ' |
Charges | 5,900 | ' | ' |
Estimated | Leasehold improvements | ' | ' | ' |
Summary of actual and estimated activity resulting from implementation of the cost reduction plan with accrued expenses and other liabilities | ' | ' | ' |
Impairment | 7,000 | ' | ' |
Estimated | Employee severance | ' | ' | ' |
Cost reduction plan | ' | ' | ' |
Percentage of staff reduced under the cost reduction plan | 20.00% | ' | ' |
Charges related to staff reduced | 5,300 | ' | ' |
Charges resulting from implementation of the cost reduction plan | ' | ' | ' |
Personnel | 5,300 | ' | ' |
Estimated | Facility closing | ' | ' | ' |
Cost reduction plan | ' | ' | ' |
Charges related to manufacturing facilities not in operations | 600 | ' | ' |
Charges resulting from implementation of the cost reduction plan | ' | ' | ' |
Leasehold | $600 | ' | ' |
Borrowings_Details
Borrowings (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||
Apr. 19, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Apr. 19, 2012 | Apr. 02, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 21, 2012 | Jun. 22, 2012 | Mar. 31, 2014 | Jun. 30, 2013 | Apr. 19, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | |
Revolving Facility | Revolving Facility | Revolving Facility | Revolving Facility | Revolving Facility | Revolving Facility | Revolving Facility | Revolving Facility | Revolving Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Notes payable | Notes payable | Notes payable | Notes payable | Notes payable | |||||
LIBOR | Prime Rate | Base Rate - Federal Funds Rate | Base Rate - Eurodollar Rate | Base Rate | Maximum | item | item | Maximum | Minimum | Maximum | ||||||||||||||||
Borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $75,000,000 | ' | ' | ' | ' | ' | ' | ' | $50,000,000 | ' | ' | ' | ' | ' |
Borrowings drawn | ' | 37,500,000 | 60,000,000 | 30,000,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Available borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' |
Borrowings repaid | ' | 48,750,000 | 37,500,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,500,000 | ' | 18,700,000 | ' | ' | ' | ' | ' | ' | ' |
Amount outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31,300,000 | ' | ' | ' | ' | ' | ' | ' |
Number of installments for periodic payment of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | 12 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of periodic payment of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issuance costs | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Calculation of the current and non-current portion of the Credit Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current portion of Credit Agreement | ' | 12,500,000 | 1,042,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit Agreement, net of current portion | ' | 23,750,000 | 46,458,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total Credit Agreement | ' | 36,250,000 | 47,500,000 | ' | 36,300,000 | 47,500,000 | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future minimum Credit Agreement obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2015 | ' | 12,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2016 | ' | 17,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2017 | ' | 6,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis | ' | ' | ' | ' | ' | ' | ' | 'LIBOR | 'Prime Rate | 'Federal Funds Rate | 'Eurodollar Rate for a one month Interest Period | 'Base Rate Loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate added to base rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | 2.50% | ' | 0.50% | 1.00% | 1.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | 2.88% | 3.03% | 3.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fee (as a percent) | ' | 0.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | 1,800,000 | 1,100,000 | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 100,000 | ' | ' |
Implied annual interest rate assumed on non-interest bearing debt (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.40% | ' | ' | ' | ' |
Notes payable outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $0 | ' | ' | ' |
Annual interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.00% | 8.40% |
Commitments_and_contingencies_1
Commitments and contingencies (Details) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 | |
Future minimum lease obligations | ' | ' | ' |
Fiscal year 2015 | $7,260,000 | ' | ' |
Fiscal year 2016 | 4,189,000 | ' | ' |
Fiscal year 2017 | 3,966,000 | ' | ' |
Fiscal year 2018 | 3,969,000 | ' | ' |
Fiscal year 2019 | 3,881,000 | ' | ' |
Thereafter | 14,147,000 | ' | ' |
Total | 37,412,000 | ' | ' |
Rent expense | 6,600,000 | 5,200,000 | 4,300,000 |
Purchase Commitment | ' | ' | ' |
Indemnities and commitments | ' | ' | ' |
Future obligations | $8,000,000 | ' | ' |
Revolving supply commitments | '90 days | ' | ' |
Purchase Commitment | Maximum | ' | ' | ' |
Indemnities and commitments | ' | ' | ' |
Payment required under the cancellation penalty provisions as a percentage of the unused contract | 20.00% | ' | ' |
Equity_Details
Equity (Details) (USD $) | 0 Months Ended | 12 Months Ended | 23 Months Ended | ||
Dec. 14, 2012 | Apr. 20, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Shares of common stock reserved for future issuances | ' | ' | ' | ' | ' |
Common stock for future issuance (in shares) | ' | ' | 14,181,000 | ' | 14,181,000 |
Stock repurchased | ' | ' | ' | ' | ' |
Value of common stock authorized to be repurchased | $75,000,000 | $50,000,000 | ' | ' | ' |
Increase in the value of common stock authorized to be repurchased | 25,000,000 | ' | ' | ' | ' |
Number of shares of common stock repurchased | ' | ' | 671,997 | 5,927,729 | 6,599,726 |
Average price per share of common stock (in dollars per share) | ' | ' | $11.18 | $10.20 | $10.30 |
Value of common stock repurchased | ' | ' | $7,511,000 | $60,445,000 | $68,000,000 |
Restricted stock units | ' | ' | ' | ' | ' |
Shares of common stock reserved for future issuances | ' | ' | ' | ' | ' |
Common stock for future issuance (in shares) | ' | ' | 716,000 | ' | 716,000 |
Performance stock options | ' | ' | ' | ' | ' |
Shares of common stock reserved for future issuances | ' | ' | ' | ' | ' |
Common stock for future issuance (in shares) | ' | ' | 1,354,000 | ' | 1,354,000 |
Stock option plan | ' | ' | ' | ' | ' |
Shares of common stock reserved for future issuances | ' | ' | ' | ' | ' |
Outstanding (in shares) | ' | ' | 7,811,000 | ' | 7,811,000 |
Reserved for future issuance (in shares) | ' | ' | 4,300,000 | ' | 4,300,000 |
Sharebased_compensation_Detail
Share-based compensation (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Share-based compensation | ' | ' | ' |
Share-based compensation expense | $17,741 | $18,474 | $15,744 |
Cost of revenue | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expense | 865 | 807 | 458 |
Research and development | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expense | 2,708 | 2,185 | 2,604 |
Selling and marketing | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expense | 5,543 | 5,258 | 4,776 |
General and administrative | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expense | 8,625 | 10,224 | 7,906 |
Employee stock purchase plan | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expense | $500 | ' | ' |
Sharebased_compensation_Detail1
Share-based compensation (Details 2) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 | |
Share-based compensation | ' | ' | ' |
Share-based compensation expense (in dollars) | $17,741,000 | $18,474,000 | $15,744,000 |
Stock options | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Vesting period | '4 years | ' | ' |
Percentage of shares that vest after one year from the date of grant | 25.00% | ' | ' |
Period from grant date after which awards begin to vest | '1 year | ' | ' |
Term of options | '10 years | ' | ' |
Share-based compensation expense (in dollars) | 13,800,000 | 14,200,000 | 12,300,000 |
Options | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 9,082,000 | ' | ' |
Granted (in shares) | 716,000 | ' | ' |
Exercised (in shares) | -624,000 | ' | ' |
Forfeited or expired (in shares) | -1,363,000 | ' | ' |
Outstanding at the end of the period (in shares) | 7,811,000 | 9,082,000 | ' |
Exercisable (in shares) | 6,027,000 | ' | ' |
Vested or expected to vest (in shares) | 7,687,000 | ' | ' |
Weighted-average exercise price | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $12.59 | ' | ' |
Granted (in dollars per share) | $12.88 | ' | ' |
Exercised (in dollars per share) | $3.36 | ' | ' |
Forfeited or expired (in dollars per share) | $13.32 | ' | ' |
Outstanding at the end of the period (in dollars per share) | $13.11 | $12.59 | ' |
Exercisable (in dollars per share) | $12.79 | ' | ' |
Vested or expected to vest (in dollars per share) | $13.08 | ' | ' |
Weighted-average remaining contractual term | ' | ' | ' |
Outstanding | '6 years 2 months 12 days | ' | ' |
Outstanding | '6 years 2 months 12 days | ' | ' |
Exercisable | '5 years 7 months 6 days | ' | ' |
Vested or expected to vest | '6 years 7 months 6 days | ' | ' |
Aggregate intrinsic value | ' | ' | ' |
Outstanding (in dollars) | 13,707,000 | ' | ' |
Exercisable (in dollars) | 12,998,000 | ' | ' |
Vested or expected to vest (in dollars) | 13,614,000 | ' | ' |
Total intrinsic value of options exercised (in dollars) | 4,900,000 | 2,600,000 | 3,900,000 |
Weighted Average assumptions | ' | ' | ' |
Fair value of stock options granted (in dollars per share) | $7.20 | $6.20 | $11.39 |
Expected volatility (as a percent) | 60.00% | 60.00% | 58.00% |
Expected term | '6 years | '6 years | '6 years |
Risk-free rate (as a percent) | 1.40% | 1.00% | 2.00% |
Expected dividends (as a percent) | 0.00% | ' | ' |
Total unrecognized compensation costs (in dollars) | 13,200,000 | ' | ' |
Remaining weighted-average period for recognition | '2 years 25 days | ' | ' |
Performance stock options | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expense (in dollars) | 500,000 | 1,900,000 | ' |
Performance period | '3 years | ' | ' |
Options | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 589,000 | ' | ' |
Granted (in shares) | 450,000 | ' | ' |
Forfeited or expired (in shares) | -353,000 | ' | ' |
Outstanding at the end of the period (in shares) | 686,000 | 589,000 | ' |
Weighted-average exercise price | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $16 | ' | ' |
Granted (in dollars per share) | $14.45 | ' | ' |
Forfeited or expired (in dollars per share) | $16 | ' | ' |
Outstanding at the end of the period (in dollars per share) | $14.98 | $16 | ' |
Weighted-average remaining contractual term | ' | ' | ' |
Outstanding | '8 years 2 months 12 days | '7 years 3 months 18 days | ' |
Granted | '9 years 2 months 12 days | ' | ' |
Outstanding | '8 years 2 months 12 days | '7 years 3 months 18 days | ' |
Performance stock options | Minimum | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Performance period | '3 years | ' | ' |
Performance stock options | Maximum | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Performance period | '5 years | ' | ' |
Performance stock units | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expense (in dollars) | 0 | 0 | ' |
Performance period | '2 years | ' | ' |
Performance stock units | Minimum | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Percentage of options earned depending on outcome of performance goals | 0.00% | ' | ' |
Performance stock units | Maximum | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Percentage of options earned depending on outcome of performance goals | 200.00% | ' | ' |
Restricted stock units | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expense (in dollars) | 3,300,000 | 2,200,000 | ' |
Weighted Average assumptions | ' | ' | ' |
Total unrecognized compensation costs (in dollars) | 6,100,000 | ' | ' |
Remaining weighted-average period for recognition | '3 years 1 month 6 days | ' | ' |
Restricted stock units | ' | ' | ' |
Nonvested at the beginning of the year (in shares) | 181,000 | ' | ' |
Granted (in shares) | 595,000 | 200,000 | ' |
Vested (in shares) | -205,000 | ' | ' |
Forfeited (in shares) | -92,000 | ' | ' |
Nonvested at the end of the year (in shares) | 479,000 | 181,000 | ' |
Weighted-average grant date fair value | ' | ' | ' |
Nonvested at the beginning of the year (in dollars per share) | $14.83 | ' | ' |
Granted (in dollars per share) | $12.29 | $10.55 | ' |
Vested (in dollars per share) | $11.98 | ' | ' |
Forfeited (in dollars per share) | $13.58 | ' | ' |
Nonvested at the end of the year (in dollars per share) | $13.13 | $14.83 | ' |
Fair values of restricted stock units vested (in dollars) | $2,500,000 | $2,200,000 | $1,000,000 |
Restricted stock units | Minimum | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Vesting period | '1 year | ' | ' |
Restricted stock units | Maximum | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Vesting period | '3 years | ' | ' |
Income_taxes_Details
Income taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Current income tax provision: | ' | ' | ' |
State | $132 | $103 | $119 |
Foreign | 6,128 | 5,202 | 4,948 |
Total current income tax provision | 6,260 | 5,305 | 5,067 |
Deferred income tax benefit: | ' | ' | ' |
Foreign | -143 | -241 | 38 |
Total income tax provision from continuing operations | 6,117 | 5,064 | 5,105 |
Income (loss) from continuing operations before income taxes | ' | ' | ' |
United States | -11,224 | -6,963 | 37,600 |
Foreign | 6,131 | 2,140 | 4,530 |
Income (loss) before income taxes | -5,093 | -4,823 | 42,130 |
Deferred tax assets: | ' | ' | ' |
Net operating loss carryforwards | 24,971 | 26,359 | ' |
Deferred revenues | 2,708 | 4,403 | ' |
Accruals, reserves and allowances | 7,698 | 6,771 | ' |
Stock compensation | 15,796 | 13,220 | ' |
Intangible assets | ' | 16 | ' |
Foreign tax credit carryovers | 15,181 | 11,571 | ' |
Partnership interest | 44 | ' | ' |
Other | 1,445 | 1,255 | ' |
Total deferred tax assets | 67,843 | 63,595 | ' |
Deferred tax liabilities | ' | ' | ' |
Fixed assets | -15,020 | -18,757 | ' |
Intangible assets | -118 | ' | ' |
Partnership Interest | ' | -113 | ' |
Unbilled receivables | -5,821 | -5,385 | ' |
Other | -426 | -115 | ' |
Total deferred tax liabilities | -21,385 | -24,370 | ' |
Valuation allowance | -46,175 | -39,084 | ' |
Net deferred tax assets | $283 | $141 | ' |
Income_taxes_Details_2
Income taxes (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Taxation | ' | ' | ' |
Increase in valuation allowance | $7,091 | $5,090 | ' |
Reconciliation of income tax rate | ' | ' | ' |
Federal tax at statutory rate (as a percent) | 34.00% | 34.00% | 34.00% |
State tax, net of federal benefit (as a percent) | -1.40% | -7.70% | 1.60% |
Foreign tax rate differential (as a percent) | 8.60% | 2.90% | 0.50% |
LLC income minority interest not taxed (as a percent) | 1.40% | -1.30% | -0.10% |
Revaluation of deferred taxes due to changes in effective income tax rates (as a percent) | -0.80% | 3.80% | -1.40% |
Research tax credits (as a percent) | -0.90% | 0.00% | 0.00% |
Permanent differences and other (as a percent) | 15.20% | 3.70% | -0.70% |
Stock compensation (as a percent) | -37.00% | -34.90% | 0.00% |
Change in valuation allowance (as a percent) | -139.00% | -105.50% | -21.80% |
Total tax benefit (as a percent) | -119.90% | -105.00% | 12.10% |
Continuing Operations | ' | ' | ' |
Taxation | ' | ' | ' |
Increase in valuation allowance | $7,091 | $5,090 | ' |
Income_taxes_Details_3
Income taxes (Details 3) (USD $) | 12 Months Ended |
Mar. 31, 2014 | |
Operating loss carryforwards | ' |
Unrealized excess tax benefits associated with share-based compensation and exhibitor options | $22,700,000 |
Activity related to our unrecognized tax benefits | ' |
Balance at the beginning of the year | 346,000 |
Increases related to prior year tax positions | 0 |
Increases related to current year tax positions | 0 |
Expiration of the statute of limitations for the assessment of taxes | 0 |
Settlements | 0 |
Balance at the end of the year | 346,000 |
Unrecognized tax benefits that will decrease the effective tax rate if recognized | 300,000 |
Unremitted earnings of the subsidiary outside of the United States | 0 |
Federal | ' |
Operating loss carryforwards | ' |
Net operating loss carryforwards | 125,200,000 |
Activity related to our unrecognized tax benefits | ' |
Tax on unremitted earnings of the subsidiary outside of the United States | 24,700,000 |
State | ' |
Operating loss carryforwards | ' |
Net operating loss carryforwards | 64,500,000 |
Foreign | ' |
Operating loss carryforwards | ' |
Foreign tax credit carryforwards | $15,200,000 |
Relatedparty_transactions_Deta
Related-party transactions (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||
Mar. 31, 2013 | 19-May-11 | Mar. 31, 2013 | Jul. 16, 2011 | 19-May-11 | 19-May-11 | 29-May-12 | Mar. 31, 2013 | 29-May-12 | 29-May-12 | |
Joshua Greer | Joshua Greer | Joshua Greer | Joshua Greer | Joshua Greer | DCH | DCH | DCH | DCH | ||
item | Time-based vesting stock option | Second stock option | Maximum | Minimum | ||||||
item | ||||||||||
Related-party transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash severance amount | ' | $450,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of equal installments of cash severance to be paid | ' | 10 | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum period of reimbursement by the entity for insurance coverage under COBRA under the terms of the separation agreement | ' | '18 months | ' | ' | ' | ' | ' | ' | ' | ' |
Pro-rated cash performance bonus as a percentage of salary to be paid pursuant to the terms of the separation agreement | ' | 30.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of annual salary used for determining pro-rated cash performance bonus | ' | 80.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares which had vesting periods accelerated under the terms of the separation agreement | ' | ' | ' | ' | 105,000 | ' | ' | ' | ' | ' |
Term of exercising options following the end of the term of the consulting agreement | ' | ' | ' | ' | '6 months | ' | ' | ' | ' | ' |
Number of shares forfeited pursuant to the terms of the separation agreement | ' | ' | ' | ' | ' | 105,000 | ' | ' | ' | ' |
Amount to be paid annually as per the consulting agreement | ' | ' | ' | 275,000 | ' | ' | ' | ' | ' | ' |
Amount paid pursuant to the separation agreement | ' | ' | 225,000 | ' | ' | ' | ' | ' | ' | ' |
Amount paid pursuant to the consulting agreement | ' | ' | 148,958 | ' | ' | ' | ' | ' | ' | ' |
Number of applications for which consulting services provided | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 |
Tenure of agreement | ' | ' | ' | ' | ' | ' | '4 months | ' | ' | ' |
Fixed monthly compensation payable per agreement | ' | ' | ' | ' | ' | ' | 20,000 | ' | ' | ' |
Additional extension to the tenure of agreement | ' | ' | ' | ' | ' | ' | ' | ' | '2 months | ' |
Notice period for additional extension to the tenure of agreement | ' | ' | ' | ' | ' | ' | '10 days | ' | ' | ' |
Compensation paid | ' | ' | ' | ' | ' | ' | ' | 80,239 | ' | ' |
Amount of related party transactions | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment_and_geographic_informa2
Segment and geographic information (Details) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 | |
item | item | item | |
Segment and geographic information | ' | ' | ' |
Number of reportable segments | 1 | ' | ' |
Number of operating segments | 3 | ' | ' |
Accounts receivable | Credit concentration | Top ten customers | ' | ' | ' |
Segment and geographic information | ' | ' | ' |
Number of customers aggregated for disclosure of concentration risk | 10 | 10 | ' |
Percentage of concentration risk | 47.00% | 47.00% | ' |
Revenue | Customer concentration | Top ten customers | ' | ' | ' |
Segment and geographic information | ' | ' | ' |
Number of customers aggregated for disclosure of concentration risk | 10 | 10 | 10 |
Percentage of concentration risk | 46.00% | 44.00% | 46.00% |
License revenue | Customer concentration | ' | ' | ' |
Segment and geographic information | ' | ' | ' |
Number of licensees | 2 | ' | ' |
License revenue | Customer concentration | License, one | ' | ' | ' |
Segment and geographic information | ' | ' | ' |
Percentage of concentration risk | 14.00% | ' | ' |
License revenue | Customer concentration | License, two | ' | ' | ' |
Segment and geographic information | ' | ' | ' |
Percentage of concentration risk | 13.00% | ' | ' |
Segment_and_geographic_informa3
Segment and geographic information (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 21, 2012 | Jun. 22, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Geographic information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total revenues | $40,648 | $55,438 | $43,929 | $59,219 | $45,449 | $46,939 | $54,986 | $68,178 | $199,234 | $215,552 | $246,628 |
Total long-lived tangible assets | 129,283 | ' | ' | ' | 151,109 | ' | ' | ' | 129,283 | 151,109 | ' |
Domestic (United States and Canada) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Geographic information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 96,159 | 106,979 | 126,151 |
Total long-lived tangible assets | 105,708 | ' | ' | ' | 101,438 | ' | ' | ' | 105,708 | 101,438 | ' |
International | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Geographic information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 103,075 | 108,573 | 120,477 |
Total long-lived tangible assets | $23,575 | ' | ' | ' | $49,671 | ' | ' | ' | $23,575 | $49,671 | ' |
Quarterly_financial_data_unaud2
Quarterly financial data (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 21, 2012 | Jun. 22, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Quarterly financial data (unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenue | $40,648 | $55,438 | $43,929 | $59,219 | $45,449 | $46,939 | $54,986 | $68,178 | $199,234 | $215,552 | $246,628 |
Gross profit | 19,902 | 27,270 | 19,906 | 28,181 | 20,274 | 20,919 | 17,654 | 31,345 | 95,259 | 90,192 | 128,690 |
Net income (loss) | -4,855 | -155 | -4,664 | -1,536 | -4,444 | -4,159 | -4,231 | 2,947 | -11,210 | -9,887 | 37,025 |
Net earnings (loss) attributable to RealD Inc. common stockholders | ($4,950) | ($271) | ($4,651) | ($1,534) | ($4,336) | ($4,160) | ($4,173) | $2,979 | ($11,406) | ($9,690) | $36,869 |
Earnings (Loss) per common share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | ($0.10) | ($0.01) | ($0.09) | ($0.03) | ($0.09) | ($0.08) | ($0.08) | $0.05 | ($0.23) | ($0.19) | $0.68 |
Diluted (in dollars per share) | ($0.10) | ($0.01) | ($0.09) | ($0.03) | ($0.09) | ($0.08) | ($0.08) | $0.05 | ($0.23) | ($0.19) | $0.65 |
Quarterly_financial_data_unaud3
Quarterly financial data (unaudited) (Details 2) | 3 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 21, 2012 | Jun. 22, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | |
Reporting Periods | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of days in reporting period | '90 days | '92 days | '92 days | '91 days | '90 days | '101 days | '91 days | '91 days | '365 days | '373 days |
Number of additional days included in fiscal period | ' | ' | ' | '1 day | ' | ' | ' | ' | ' | ' |
Number of days less than prior reporting period | ' | '9 days | ' | ' | ' | ' | ' | ' | '8 days | ' |
Number of days more in previous year's quarter | ' | -8.90% | 1.10% | ' | ' | ' | ' | ' | -2.10% | ' |
SCHEDULE_IIVALUATION_AND_QUALI1
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 23, 2012 |
Allowance for doubtful accounts and customer credits | ' | ' | ' |
Valuation allowances | ' | ' | ' |
Balance at beginning of period | $2,649 | $4,224 | $6,803 |
Additions charged to cost and expenses | 1,536 | ' | ' |
Other Adjustments/Deductions | -952 | -1,575 | -2,579 |
Balance at end of period | 3,233 | 2,649 | 4,224 |
Deferred tax valuation allowance | ' | ' | ' |
Valuation allowances | ' | ' | ' |
Balance at beginning of period | 39,084 | 33,994 | 43,181 |
Additions charged to cost and expenses | 7,091 | 5,090 | ' |
Other Adjustments/Deductions | ' | ' | -9,187 |
Balance at end of period | $46,175 | $39,084 | $33,994 |