Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Sep. 30, 2013 | Nov. 05, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'RealD Inc. | ' |
Entity Central Index Key | '0001327471 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--03-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 49,827,162 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Condensed_consolidated_balance
Condensed consolidated balance sheets (USD $) | Sep. 30, 2013 | Mar. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $34,227 | $31,020 |
Accounts receivable, net | 42,851 | 45,472 |
Inventories | 19,056 | 15,430 |
Deferred costs - eyewear | 105 | 538 |
Prepaid expenses and other current assets | 5,807 | 3,973 |
Total current assets | 102,046 | 96,433 |
Property and equipment, net | 25,099 | 25,002 |
Cinema systems, net | 120,408 | 125,379 |
Digital projectors, net-held for sale | 259 | 728 |
Goodwill | 10,657 | 10,657 |
Other intangibles, net | 6,787 | 7,417 |
Deferred income taxes | 3,001 | 3,001 |
Other assets | 4,904 | 5,031 |
Total assets | 273,161 | 273,648 |
Current liabilities: | ' | ' |
Accounts payable | 11,316 | 22,737 |
Accrued expenses and other liabilities | 23,641 | 25,013 |
Deferred revenue | 9,141 | 9,916 |
Income taxes payable | 1,067 | 603 |
Deferred income taxes | 2,857 | 2,860 |
Current portion of Credit Agreement | 12,500 | 1,042 |
Total current liabilities | 60,522 | 62,171 |
Credit Agreement, net of current portion | 52,500 | 46,458 |
Deferred revenue, net of current portion | 8,049 | 10,392 |
Other long-term liabilities and customer deposits | 5,907 | 5,438 |
Total liabilities | 126,978 | 124,459 |
Commitments and contingencies | ' | ' |
Equity (deficit) | ' | ' |
Common stock, $0.0001 par value, 200,000 shares authorized; 49,146 and 49,365 shares issued and outstanding at September 30, 2013 and March 31, 2013, respectively | 343,194 | 332,694 |
Accumulated deficit | -196,542 | -182,846 |
Accumulated other comprehensive income | 320 | 115 |
Total RealD Inc. stockholders' equity | 146,972 | 149,963 |
Noncontrolling interest | -789 | -774 |
Total equity | 146,183 | 149,189 |
Total liabilities and equity | $273,161 | $273,648 |
Condensed_consolidated_balance1
Condensed consolidated balance sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Mar. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Condensed 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 | 49,146 | 49,365 |
Common stock, shares outstanding | 49,146 | 49,365 |
Condensed_consolidated_stateme
Condensed consolidated statements of operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 |
Revenue: | ' | ' | ' | ' |
License | $30,976 | $34,976 | $68,282 | $76,165 |
Product and other | 12,953 | 20,010 | 34,866 | 46,999 |
Total revenue | 43,929 | 54,986 | 103,148 | 123,164 |
Cost of revenue: | ' | ' | ' | ' |
License | 11,691 | 14,283 | 22,509 | 24,296 |
Product and other | 12,332 | 23,049 | 32,552 | 49,869 |
Total cost of revenue | 24,023 | 37,332 | 55,061 | 74,165 |
Gross profit | 19,906 | 17,654 | 48,087 | 48,999 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 4,685 | 4,592 | 10,229 | 9,490 |
Selling and marketing | 6,115 | 5,924 | 13,453 | 12,819 |
General and administrative | 11,950 | 12,189 | 26,372 | 23,451 |
Total operating expenses | 22,750 | 22,705 | 50,054 | 45,760 |
Operating income (loss) | -2,844 | -5,051 | -1,967 | 3,239 |
Interest expense, net | -751 | -288 | -1,240 | -601 |
Other income (loss) | 483 | -21 | 274 | -374 |
Income (loss) before income taxes | -3,112 | -5,360 | -2,933 | 2,264 |
Income tax expense (benefit) | 1,552 | -1,129 | 3,267 | 3,548 |
Net loss | -4,664 | -4,231 | -6,200 | -1,284 |
Net loss attributable to noncontrolling interest | 13 | 58 | 15 | 90 |
Net loss attributable to RealD Inc. common stockholders | ($4,651) | ($4,173) | ($6,185) | ($1,194) |
Loss per common share: | ' | ' | ' | ' |
Basic (in dollars per share) | ($0.09) | ($0.08) | ($0.13) | ($0.02) |
Diluted (in dollars per share) | ($0.09) | ($0.08) | ($0.13) | ($0.02) |
Shares used in computing loss per common share: | ' | ' | ' | ' |
Basic (in shares) | 49,260 | 53,915 | 49,479 | 54,314 |
Diluted (in shares) | 49,260 | 53,915 | 49,479 | 54,314 |
Condensed_consolidated_stateme1
Condensed consolidated statements of comprehensive income (loss) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 |
Condensed consolidated statements of comprehensive income (loss) | ' | ' | ' | ' |
Net loss | ($4,664) | ($4,231) | ($6,200) | ($1,284) |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Foreign currency translation gains | 68 | ' | 205 | ' |
Other comprehensive income, net of tax | 68 | ' | 205 | ' |
Comprehensive loss | ($4,596) | ($4,231) | ($5,995) | ($1,284) |
Condensed_consolidated_stateme2
Condensed consolidated statements of cash flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 21, 2012 |
Cash flows from operating activities | ' | ' |
Net loss | ($6,200) | ($1,284) |
Adjustments to reconcile net income (loss) to net cash used by operating activities: | ' | ' |
Depreciation and amortization | 19,764 | 15,936 |
Deferred income tax | -3 | -56 |
Non-cash interest (income) expense | 140 | 157 |
Non-cash stock compensation | 9,118 | 9,094 |
Gain on sale of digital projectors | -18 | ' |
Loss on disposal of property and equipment | ' | 44 |
Impairment of long-lived assets and related purchase commitments | 2,783 | 5,901 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 2,621 | 6,541 |
Inventories | -3,626 | 25,720 |
Prepaid expenses and other current assets | -1,834 | -676 |
Deferred costs - eyewear | 433 | 374 |
Other assets | 127 | -1,598 |
Accounts payable | -11,420 | -7,256 |
Accrued expenses and other liabilities | -1,512 | -3,323 |
Other long-term liabilities, customer deposits and virtual print fee liability | 229 | 308 |
Income taxes receivable/payable | 464 | 449 |
Deferred revenue | -3,118 | 288 |
Net cash provided by operating activities | 7,948 | 50,619 |
Cash flows from investing activities | ' | ' |
Purchases of property and equipment | -3,343 | -6,266 |
Purchases of cinema systems and related components | -13,044 | -6,664 |
Proceeds from sale of digital projectors | 70 | 2,474 |
Net cash used in investing activities | -16,317 | -10,456 |
Cash flows from financing activities | ' | ' |
Proceeds from credit facility | 37,500 | 25,000 |
Repayments on credit facility | -20,000 | -37,500 |
Payments of debt issuance costs | ' | -1,167 |
Proceeds from exercise of stock options | 1,079 | 782 |
Proceeds from employee stock purchase plan | 303 | 301 |
Purchases of treasury stock | -7,511 | -26,235 |
Distributions to noncontrolling interests | ' | -1,000 |
Net cash (used in) provided by financing activities | 11,371 | -39,819 |
Effect of currency exchange rate changes on cash and cash equivalent | 205 | ' |
Net increase in cash and cash equivalents | 3,207 | 344 |
Cash and cash equivalents, beginning of period | 31,020 | 24,894 |
Cash and cash equivalents, end of period | $34,227 | $25,238 |
Business_and_basis_of_presenta
Business and basis of presentation | 6 Months Ended |
Sep. 30, 2013 | |
Business and basis of presentation | ' |
Business and basis of presentation | ' |
1. Business and basis of presentation | |
RealD Inc. is a leading global licensor of 3D and other visual technologies. Except where specifically noted or the context otherwise requires, the use of terms such as the “Company” or “RealD” in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 refers to RealD Inc. and its subsidiaries. | |
The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and include all adjustments (consisting of only normal recurring adjustments, unless otherwise indicated), necessary for a fair presentation of our condensed consolidated financial statements. Interim results are not necessarily indicative of results for any subsequent quarter, the full fiscal year or any future periods. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended March 31, 2013. | |
The condensed 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 condensed consolidated financial statements. The noncontrolling interests in those assets, liabilities, and operations are reflected as non-controlling interest in the condensed consolidated balance sheets under equity and condensed consolidated statements of operations. | |
All significant intercompany balances and transactions have been eliminated in consolidation. |
Summary_of_significant_account
Summary of significant accounting policies | 6 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
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 of fiscal year 2013 ended on December 31, 2012. As a result, the current second fiscal quarter ended on September 30, 2013 as compared to the second quarter of fiscal year 2013, which ended on September 21, 2012. Our fiscal year 2014 consists of four 3-month periods for a total of 12 months and will end on March 31, 2014. | |||||||||||||
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 our 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 income attributable to our 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 loss per share of common stock for the three and six months ended September 30, 2013 and September 21, 2012 was as follows: | |||||||||||||
Three months ended | Six months ended | ||||||||||||
September 30, | September 21, | September 30, | September 21, | ||||||||||
(in thousands, except share and per share data) | 2013 | 2012 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||||
Net loss | $ | -4,664 | $ | -4,231 | $ | -6,200 | $ | -1,284 | |||||
Net loss attributable to noncontrolling interest | 13 | 58 | 15 | 90 | |||||||||
Net loss attributable to RealD Inc. common stockholders | $ | -4,651 | $ | -4,173 | $ | -6,185 | $ | -1,194 | |||||
Denominator: | |||||||||||||
Weighted-average common shares outstanding (basic) | 49,260 | 53,915 | 49,479 | 54,314 | |||||||||
Effect of dilutive securities | – | – | – | – | |||||||||
Weighted-average common shares outstanding (diluted) | 49,260 | 53,915 | 49,479 | 54,314 | |||||||||
Loss per common share: | |||||||||||||
Basic | $ | -0.09 | $ | -0.08 | $ | -0.13 | $ | -0.02 | |||||
Diluted | $ | -0.09 | $ | -0.08 | $ | -0.13 | $ | -0.02 | |||||
The weighted-average number of anti-dilutive shares excluded from the calculation of diluted loss per common share for the three and six months ended September 30, 2013 and September 21, 2012 was as follows: | |||||||||||||
Three months ended | Six months ended | ||||||||||||
September 30, | September 21, | September 30, | September 21, | ||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||
Options, employee stock purchase plan, restricted stock units and warrants to purchase common stock | 9,612 | 9,467 | 9,741 | 7,451 | |||||||||
Due to the loss attributable to our common stockholders in the three and six months ended September 30, 2013, basic loss per share of common stock and diluted loss per share of common stock are the same because the effect of potentially dilutive securities would be antidilutive. | |||||||||||||
Derivative instruments | |||||||||||||
Our derivative instruments are recorded at fair value in other current assets and other liabilities, respectively, in the condensed consolidated balance sheets. Changes in fair value are reported as a component of other income or loss on our condensed 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. As of September 30, 2013, we had no outstanding forward contracts. As of March 31, 2013, the carrying amounts of our foreign currency forward contracts were not significant and were classified as Level 2 fair value instruments, which was determined based on observable inputs that were corroborated by market data. For both the three months ended September 30, 2013 and September 21, 2012, the net loss related to the change in fair value of our foreign currency forward contracts was not significant. For both the six months ended September 30, 2013 and September 21, 2012, the net loss related to the change in fair value of our foreign currency forward contracts was not significant. Foreign currency master agreements typically allow the netting of receivables and payables. The gross receivable balances and the gross payable balances were $0 as of September 30, 2013 and not significant as of March 31, 2013. | |||||||||||||
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 $3.0 million and $2.6 million as of September 30, 2013 and March 31, 2013, respectively. | |||||||||||||
Inventories and deferred costs-eyewear | |||||||||||||
Inventories and deferred costs-eyewear represent RealD 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 September 30, 2013 and March 31, 2013, the inventory reserve as a result of our net realizable value analyses was $0.3 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 the 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. RealD eyewear inventory costs that have not yet been expensed are reported as deferred costs-eyewear. | |||||||||||||
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. | |||||||||||||
For the three months ended September 30, 2013 and September 21, 2012, impairment charges for all impaired RealD Cinema Systems charged to cost of revenue totaled $1.8 million and $4.3 million, respectively. For the six months ended September 30, 2013 and September 21, 2012, impairment charges for all impaired RealD Cinema Systems charged to cost of revenue totaled $2.8 million and $5.9 million, respectively. | |||||||||||||
Revenue recognition | |||||||||||||
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. Our licensees, however, do not report and pay for such license revenue until after the admission has occurred, which may be received subsequent to our fiscal period end. 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 quarter in which the admission and usage occurs, but only when reasonable estimates of such amounts can be made. | |||||||||||||
Comprehensive income (loss) | |||||||||||||
Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). The only component of other comprehensive income or loss is unrealized foreign currency translation gains (losses). There were no reclassifications out of accumulated other comprehensive income (loss) during the three and six months ended September 30, 2013 and September 21, 2012. | |||||||||||||
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 $1.7 million and $2.4 million for the three months ended September 30, 2013 and September 21, 2012, respectively. Shipping and handling costs recognized in cost of revenue were $3.9 million and $4.7 million for the six months ended September 30, 2013 and September 21, 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. We do not expect the adoption of ASU 2013-10 to 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. |
Property_and_equipment_RealD_C
Property and equipment, RealD Cinema Systems and digital projectors | 6 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
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: | ||||||||
September 30, | March 31, | |||||||
(in thousands) | 2013 | 2013 | ||||||
RealD Cinema Systems | $ | 203,921 | $ | 194,527 | ||||
Digital projectors - held for sale | 944 | 1,634 | ||||||
Leasehold improvements | 17,329 | 14,442 | ||||||
Machinery and equipment | 7,322 | 6,198 | ||||||
Furniture and fixtures | 1,305 | 1,122 | ||||||
Computer equipment and software | 9,275 | 7,628 | ||||||
Construction in process | 35 | 2,637 | ||||||
Total | $ | 240,131 | $ | 228,188 | ||||
Less accumulated depreciation | -94,365 | -77,079 | ||||||
Property and equipment, RealD Cinema Systems and digital projectors, net | $ | 145,766 | $ | 151,109 | ||||
Depreciation expense amounted to $9.9 million and $8.0 million for the three months ended September 30, 2013 and September 21, 2012, respectively. Depreciation expense amounted to $19.1 million and $15.9 million for the six months ended September 30, 2013 and September 21, 2012, respectively. | ||||||||
During the six months ended September 30, 2013, we received $0.1 million in cash from motion picture exhibitor customers for the sale of digital projectors. During the six months ended September 21, 2012, 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 three months ended September 21, 2012, 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 three months ended September 21, 2012, impairment charged to cost of revenue for the related outstanding purchase commitment totaled $3.5 million. | ||||||||
During the three months ended September 30, 2013 and September 21, 2012, impairment charges for all impaired RealD Cinema Systems including related purchase commitments charged to cost of revenue totaled $1.8 million and $4.3 million, respectively. During the six months ended September 30, 2013 and September 21, 2012, impairment charges for all impaired RealD Cinema Systems including related purchase commitments charged to cost of revenue totaled $2.8 million and $5.9 million, respectively. |
Borrowings
Borrowings | 6 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Borrowings | ' | |||||||
Borrowings | ' | |||||||
4. 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”). Each draw results in a permanent reduction in the funds available under the Term Loan Facility. During the first quarter of fiscal year 2013, we borrowed $25 million. During the second quarter of fiscal year 2014, we borrowed $25 million. Therefore, as of September 30, 2013, we had fully drawn the Term Loan Facility. During the second quarter of fiscal year 2013, we repaid $12.5 million. | ||||||||
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 September 30, 2013, there were $65.0 million in borrowings under the Credit Agreement. The current and non-current portions of the Credit Agreement due as of September 30, 2013 and March 31, 2013 were as follows: | ||||||||
September 30, | March 31, | |||||||
2013 | 2013 | |||||||
(in thousands) | (unaudited) | |||||||
Current portion of Credit Agreement | $ | 12,500 | $ | 1,042 | ||||
Credit Agreement, net of current portion | 52,500 | 46,458 | ||||||
Total Credit Agreement | $ | 65,000 | $ | 47,500 | ||||
The Revolving Facility matures on April 17, 2015. As of September 30, 2013, the aggregate Term Loan Facility commitment of $50 million was drawn in full and $12.5 million was repaid. Twelve quarterly payments of $3.1 million begin on December 31, 2013 and continue through September 30, 2016. | ||||||||
At September 30, 2013, our future minimum Credit Agreement obligations were as follows: | ||||||||
(in thousands) | ||||||||
Fiscal year 2014 | $ | 6,250 | ||||||
Fiscal year 2015 | 12,500 | |||||||
Fiscal year 2016 | 40,000 | |||||||
Fiscal year 2017 | 6,250 | |||||||
Total | $ | 65,000 | ||||||
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 September 30, 2013, 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. | ||||||||
The 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 one and one-half percent (1.5%) plus the greatest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the Prime Rate, and (c) the Eurodollar Rate for a one month Interest Period on such day plus 1.00%. | ||||||||
The borrowings outstanding under the Credit Agreement bear interest at approximately 2.82%. Interest expense related to our borrowings under our Credit Agreement was $0.5 million and $0.3 million for the three months ended September 30, 2013 and September 21, 2012, respectively. Interest expense related to our borrowings under our Credit Agreement was $1.1 million and $0.6 million for the six months ended September 30, 2013 and September 21, 2012, respectively. Interest expense for fiscal year 2013 includes that expensed under the previous credit and security agreements. | ||||||||
Commitments_and_contingencies
Commitments and contingencies | 6 Months Ended |
Sep. 30, 2013 | |
Commitments and contingencies | ' |
Commitments and contingencies | ' |
5. Commitments and contingencies | |
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 condensed 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 $6.8 million at September 30, 2013 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. |
Sharebased_compensation
Share-based compensation | 6 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Share-based compensation | ' | ||||||||||||
Share-based compensation | ' | ||||||||||||
6. 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. | |||||||||||||
Share-based compensation expense for all share-based arrangements for the three and six months ended September 30, 2013 and September 21, 2012 was as follows: | |||||||||||||
Three months ended | Six months ended | ||||||||||||
September 30, | September 21, | September 30, | September 21, | ||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||
Share-based compensation | |||||||||||||
Cost of revenue | $ | 242 | $ | 267 | $ | 541 | $ | 444 | |||||
Research and development | 768 | 538 | 1,475 | 968 | |||||||||
Selling and marketing | 1,259 | 1,362 | 2,581 | 2,699 | |||||||||
General and administrative | 2,204 | 2,645 | 4,521 | 4,983 | |||||||||
Total | $ | 4,473 | $ | 4,812 | $ | 9,118 | $ | 9,094 | |||||
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. For the six months ended September 30, 2013, we granted 0.5 million stock options at a weighted average grant date fair value of $7.75 per share. For the three months ended September 30, 2013 and September 21, 2012, share-based compensation expense related to stock options and our employee stock purchase plan was $3.5 million and $3.6 million, respectively. For the six months ended September 30, 2013 and September 21, 2012, share-based compensation expense related to stock options and our employee stock purchase plan was $7.1 million and $7.0 million, respectively. | |||||||||||||
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 three months ended September 30, 2013 and September 21, 2012, share-based compensation expense related to performance stock options was $0.1 million and $0.5 million, respectively. For the six months ended September 30, 2013 and September 21, 2012, share-based compensation expense related to performance stock options was $0.5 million and $0.9 million, respectively. | |||||||||||||
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 three and six months ended September 30, 2013, share-based compensation related to performance stock units was $(0.1) million and $0, respectively, based on the period end estimates of performance-period licensing revenue. For the three and six months ended September 21, 2012, there was no share-based compensation expense related to performance 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 six months ended September 30, 2013, we granted 0.4 million restricted stock units at a weighted average grant date fair value of $13.62 per restricted stock unit. For the three months ended September 30, 2013 and September 21, 2012, share-based compensation expense related to restricted stock units was $0.9 million and $0.7 million, respectively. For the six months ended September 30, 2013 and September 21, 2012, share-based compensation expense related to restricted stock units was $1.4 million and $1.2 million, respectively. |
Income_taxes
Income taxes | 6 Months Ended |
Sep. 30, 2013 | |
Income taxes | ' |
Income taxes | ' |
7. Income taxes | |
Our income tax expense (benefit) for the three months ended September 30, 2013 and September 21, 2012 was $1.6 million and $(1.1) million, respectively. Our income tax expense for the six months ended September 30, 2013 and September 21, 2012 was $3.3 million and $3.5 million, respectively. We have net operating losses that may potentially be offset against future earnings. We file federal income tax returns and income tax returns in various state and foreign jurisdictions. 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. | |
As of September 30, 2013, we have determined based on the weight of the available evidence, both positive and negative, to provide for a valuation allowance against substantially all of the net deferred tax assets. The current deferred tax assets not reserved for by the valuation allowance are those in foreign jurisdictions or amounts that may be carried back in future years. If there is a change in circumstances that causes a change in judgment about the realizability of the deferred tax assets, we will adjust all or a portion of the applicable valuation allowance in the period when such change occurs. |
Equity
Equity | 6 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Equity | ' | |||||||||
Equity | ' | |||||||||
8. Equity | ||||||||||
A summary of the changes in total equity for the six months ended September 30, 2013 was as follows: | ||||||||||
RealD Inc. | ||||||||||
stockholders’ | Noncontrolling | Total | ||||||||
(in thousands) | deficit | interest | equity (deficit) | |||||||
Balance, March 31, 2013 | $ | 149,963 | $ | -774 | $ | 149,189 | ||||
Share-based compensation | 9,118 | - | 9,118 | |||||||
Exercise of stock options | 1,079 | - | 1,079 | |||||||
Purchase and distribution of stock under employee stock purchase plan | 303 | - | 303 | |||||||
Purchases of treasury stock | -7,511 | - | -7,511 | |||||||
Other comprehensive loss, net of tax | 205 | - | 205 | |||||||
Net loss | -6,185 | -15 | -6,200 | |||||||
Balance, September 30, 2013 | $ | 146,972 | $ | -789 | $ | 146,183 | ||||
On April 20, 2012, we announced that our board of directors had approved an authorization to repurchase up to $50 million of our common stock. On December 14, 2012, our board of directed 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 three months and six months periods ended September 30, 2013, 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. |
Relatedparty_transactions
Related-party transactions | 6 Months Ended |
Sep. 30, 2013 | |
Related-party transactions | ' |
Related-party transactions | ' |
9. 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 will receive 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 will remain exercisable for 6 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 will be 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 to be effective on July 16, 2012 upon the expiration of the consulting agreement. | |
For the three months ended September 21, 2012, we paid Mr. Greer $11,458 pursuant to his consulting agreement. For the six months ended September 21, 2012, we paid Mr. Greer $180,000 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 will provide certain consulting services regarding the application of one or more of our technologies in the consumer electronics industry, all as we and DCH may agree upon from time to time. The DCH Agreement has a term of 4 months and DCH shall be entitled to receive aggregate fixed compensation of $20,000 per month during the term of the DCH Agreement. We have 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. | |
For the three months ended September 21, 2012, we paid DCH $20,000 pursuant to the DCH Agreement. |
Subsequent_events
Subsequent events | 6 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Subsequent events | ' | ||||||||||||
Subsequent events | ' | ||||||||||||
10. Subsequent events | |||||||||||||
Credit Agreement repayments | |||||||||||||
On October 16, 2013, we repaid $5.0 million of our Credit Agreement and on October 23, 2013, we repaid an additional $7.5 million. | |||||||||||||
Executive Officer retirement | |||||||||||||
On October 23, 2013, we announced that Joseph Peixoto, President, Worldwide Cinema of the Company, will retire effective March 31, 2014. We entered into a Separation Agreement and General Release of Claims (the “Separation Agreement”) with Mr. Peixoto effective as of October 22, 2013. | |||||||||||||
Pursuant to the terms of the Separation Agreement, in the event the Separation Agreement becomes effective pursuant to its terms and is not revoked by Mr. Peixoto during the applicable revocation period and Mr. Peixoto is otherwise in compliance with the terms of the Separation Agreement, Mr. Peixoto will receive the following separation benefits: (i) cash severance of $937,500 paid in installments over eighteen months, with the first such installment to be paid on the 55th day after the earliest to occur of (a) March 31, 2014 or (b) the date of Mr. Peixoto’s death (the “Termination Date”); (ii) reimbursement from the Company for insurance coverage under COBRA for 12 months following the Termination Date or such earlier time as Mr. Peixoto becomes eligible for insurance through another employer; (iii) eligibility to receive a pro-rated cash performance bonus for fiscal year 2014 (to be paid no later than June 15, 2014) under the Company’s Management Incentive Plan; and (iv) continuation of the vesting of all equity incentive grants that have been made to Mr. Peixoto under the Company’s equity incentive plans for 12 months following the Termination Date, which such equity incentive grants shall remain exercisable for 24 months following the Termination Date. The payments described above shall be subject to required withholdings and authorized deductions. In the event that Mr. Peixoto resigns his employment without Good Reason (as defined in the Employment Agreement between the Company and Mr. Peixoto effective as of May 25, 2010 (the “Employment Agreement”) previously filed with the SEC) or the Company terminates Mr. Peixoto’s employment for Cause (as defined in the Employment Agreement), he will not be eligible for the separation benefits described above. | |||||||||||||
The Separation Agreement contains a general release by Mr. Peixoto of all claims against the Company and its affiliates and representatives. In addition, as a condition to Mr. Peixoto’s right to receive the separation benefits described above, Mr. Peixoto has agreed to execute a second general release of all claims against the Company and its affiliates and representatives within 60 days after the Termination Date. | |||||||||||||
Executive Officer departure | |||||||||||||
As of November 11, 2013, the Company and Minard Hamilton entered into a Separation Agreement and General Release of Claims (the “Hamilton Separation Agreement”) pursuant to which Mr. Hamilton will no longer serve as Executive Vice-President, Mobile and Consumer of the Company effective as of February 6, 2014. In the event the Hamilton Separation Agreement becomes effective pursuant to its terms and is not revoked by Mr. Hamilton during the applicable revocation period and Mr. Hamilton is otherwise in compliance with the terms of the Hamilton Separation Agreement, Mr. Hamilton will receive the following separation benefits: (i) cash severance of $300,000 paid in installments over twelve months, with the first such installment be paid on the earliest to occur of: (a) February 6, 2014 or (b) the date of Mr. Hamilton’s death (the “Hamilton Termination Date”); (ii) reimbursement from the Company for insurance coverage under COBRA for 12 months following the Hamilton Termination Date or such earlier time as Mr. Hamilton becomes eligible for insurance through another employer; and (iii) a relocation allowance of $75,000. The payments described above shall be subject to required withholdings and authorized deductions. | |||||||||||||
The Hamilton Separation Agreement contains a general release by Mr. Hamilton of all claims against the Company and its affiliates and representatives. In addition, as a condition to Mr. Hamilton’s right to receive the separation benefits described above, Mr. Hamilton has agreed to execute a second general release of all claims against the Company and its affiliates and representatives within 60 days after the Hamilton Termination Date. | |||||||||||||
Cost reduction plan | |||||||||||||
We recently 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. We are also re-scoping and making other changes to certain research and development projects, reducing general and administrative expenses and streamlining 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. The total annual cost savings are estimated to be $15.0 million, of which $10.9 million is detailed below for personnel and facilities. The remainder results from a variety of the changes mentioned above. | |||||||||||||
An element of that plan is to reduce our workforce by approximately 20%, resulting in termination charges of approximately $4.4 million to $4.9 million. Further, we expect to incur approximately $0.5 million to $0.9 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 $4.9 million to $5.8 million. The following table summarizes the currently estimated charges resulting from implementation of the cost reduction plan: | |||||||||||||
Estimated termination and implementation charges | |||||||||||||
(in thousands) | Personnel | Lease | Impairment | Total | |||||||||
Cost of revenue | $ | 842 | $ | 800 | $ | 100 | $ | 1,742 | |||||
Research and development | 755 | 0 | 0 | 755 | |||||||||
Selling and marketing | 1,995 | 0 | 0 | 1,995 | |||||||||
General and administrative | 1,256 | 0 | 0 | 1,256 | |||||||||
Total | $ | 4,848 | $ | 800 | $ | 100 | $ | 5,748 | |||||
We have initiated many of the above-noted cost reduction actions and plan to fully implement the remaining actions by the end of fiscal year 2014. We estimate that the bulk of these expenses will be incurred during the third and fourth quarters of fiscal year 2014 but lease and impairment charges might not occur until fiscal year 2015. Redundant office space resulting from the staff reduction might not generate sufficient sublease revenue to cover approximately $7.0 million in leasehold improvements within fixed assets, which would result in a valuation of the appropriate impairment charges. We currently estimate the sublease revenue would at least cover current lease expense plus depreciation of leasehold improvements. There is no guarantee that termination and implementation costs will not exceed the estimates, or that any net cost reduction will actually be achieved. | |||||||||||||
Summary_of_significant_account1
Summary of significant accounting policies (Policies) | 6 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
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 of fiscal year 2013 ended on December 31, 2012. As a result, the current second fiscal quarter ended on September 30, 2013 as compared to the second quarter of fiscal year 2013, which ended on September 21, 2012. Our fiscal year 2014 consists of four 3-month periods for a total of 12 months and will end on March 31, 2014. | |||||||||||||
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 our 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 income attributable to our 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 loss per share of common stock for the three and six months ended September 30, 2013 and September 21, 2012 was as follows: | |||||||||||||
Three months ended | Six months ended | ||||||||||||
September 30, | September 21, | September 30, | September 21, | ||||||||||
(in thousands, except share and per share data) | 2013 | 2012 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||||
Net loss | $ | -4,664 | $ | -4,231 | $ | -6,200 | $ | -1,284 | |||||
Net loss attributable to noncontrolling interest | 13 | 58 | 15 | 90 | |||||||||
Net loss attributable to RealD Inc. common stockholders | $ | -4,651 | $ | -4,173 | $ | -6,185 | $ | -1,194 | |||||
Denominator: | |||||||||||||
Weighted-average common shares outstanding (basic) | 49,260 | 53,915 | 49,479 | 54,314 | |||||||||
Effect of dilutive securities | – | – | – | – | |||||||||
Weighted-average common shares outstanding (diluted) | 49,260 | 53,915 | 49,479 | 54,314 | |||||||||
Loss per common share: | |||||||||||||
Basic | $ | -0.09 | $ | -0.08 | $ | -0.13 | $ | -0.02 | |||||
Diluted | $ | -0.09 | $ | -0.08 | $ | -0.13 | $ | -0.02 | |||||
The weighted-average number of anti-dilutive shares excluded from the calculation of diluted loss per common share for the three and six months ended September 30, 2013 and September 21, 2012 was as follows: | |||||||||||||
Three months ended | Six months ended | ||||||||||||
September 30, | September 21, | September 30, | September 21, | ||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||
Options, employee stock purchase plan, restricted stock units and warrants to purchase common stock | 9,612 | 9,467 | 9,741 | 7,451 | |||||||||
Due to the loss attributable to our common stockholders in the three and six months ended September 30, 2013, basic loss per share of common stock and diluted loss per share of common stock are the same because the effect of potentially dilutive securities would be antidilutive. | |||||||||||||
Derivative instruments | ' | ||||||||||||
Derivative instruments | |||||||||||||
Our derivative instruments are recorded at fair value in other current assets and other liabilities, respectively, in the condensed consolidated balance sheets. Changes in fair value are reported as a component of other income or loss on our condensed 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. As of September 30, 2013, we had no outstanding forward contracts. As of March 31, 2013, the carrying amounts of our foreign currency forward contracts were not significant and were classified as Level 2 fair value instruments, which was determined based on observable inputs that were corroborated by market data. For both the three months ended September 30, 2013 and September 21, 2012, the net loss related to the change in fair value of our foreign currency forward contracts was not significant. For both the six months ended September 30, 2013 and September 21, 2012, the net loss related to the change in fair value of our foreign currency forward contracts was not significant. Foreign currency master agreements typically allow the netting of receivables and payables. The gross receivable balances and the gross payable balances were $0 as of September 30, 2013 and not significant as of March 31, 2013. | |||||||||||||
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 $3.0 million and $2.6 million as of September 30, 2013 and March 31, 2013, respectively. | |||||||||||||
Inventories and deferred costs-eyewear | ' | ||||||||||||
Inventories and deferred costs-eyewear | |||||||||||||
Inventories and deferred costs-eyewear represent RealD 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 September 30, 2013 and March 31, 2013, the inventory reserve as a result of our net realizable value analyses was $0.3 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 the 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. RealD eyewear inventory costs that have not yet been expensed are reported as deferred costs-eyewear. | |||||||||||||
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. | |||||||||||||
For the three months ended September 30, 2013 and September 21, 2012, impairment charges for all impaired RealD Cinema Systems charged to cost of revenue totaled $1.8 million and $4.3 million, respectively. For the six months ended September 30, 2013 and September 21, 2012, impairment charges for all impaired RealD Cinema Systems charged to cost of revenue totaled $2.8 million and $5.9 million, respectively. | |||||||||||||
Revenue recognition | ' | ||||||||||||
Revenue recognition | |||||||||||||
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. Our licensees, however, do not report and pay for such license revenue until after the admission has occurred, which may be received subsequent to our fiscal period end. 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 quarter in which the admission and usage occurs, but only when reasonable estimates of such amounts can be made. | |||||||||||||
Comprehensive income (loss) | ' | ||||||||||||
Comprehensive income (loss) | |||||||||||||
Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). The only component of other comprehensive income or loss is unrealized foreign currency translation gains (losses). There were no reclassifications out of accumulated other comprehensive income (loss) during the three and six months ended September 30, 2013 and September 21, 2012. | |||||||||||||
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 $1.7 million and $2.4 million for the three months ended September 30, 2013 and September 21, 2012, respectively. Shipping and handling costs recognized in cost of revenue were $3.9 million and $4.7 million for the six months ended September 30, 2013 and September 21, 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. We do not expect the adoption of ASU 2013-10 to 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. |
Summary_of_significant_account2
Summary of significant accounting policies (Tables) | 6 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Summary of significant accounting policies | ' | ||||||||||||
Schedule of calculation of the basic and diluted loss per share of common stock | ' | ||||||||||||
Three months ended | Six months ended | ||||||||||||
September 30, | September 21, | September 30, | September 21, | ||||||||||
(in thousands, except share and per share data) | 2013 | 2012 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||||
Net loss | $ | -4,664 | $ | -4,231 | $ | -6,200 | $ | -1,284 | |||||
Net loss attributable to noncontrolling interest | 13 | 58 | 15 | 90 | |||||||||
Net loss attributable to RealD Inc. common stockholders | $ | -4,651 | $ | -4,173 | $ | -6,185 | $ | -1,194 | |||||
Denominator: | |||||||||||||
Weighted-average common shares outstanding (basic) | 49,260 | 53,915 | 49,479 | 54,314 | |||||||||
Effect of dilutive securities | – | – | – | – | |||||||||
Weighted-average common shares outstanding (diluted) | 49,260 | 53,915 | 49,479 | 54,314 | |||||||||
Loss per common share: | |||||||||||||
Basic | $ | -0.09 | $ | -0.08 | $ | -0.13 | $ | -0.02 | |||||
Diluted | $ | -0.09 | $ | -0.08 | $ | -0.13 | $ | -0.02 | |||||
Schedule of weighted-average number of anti-dilutive shares excluded from the calculation of diluted loss per common share | ' | ||||||||||||
Three months ended | Six months ended | ||||||||||||
September 30, | September 21, | September 30, | September 21, | ||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||
Options, employee stock purchase plan, restricted stock units and warrants to purchase common stock | 9,612 | 9,467 | 9,741 | 7,451 |
Property_and_equipment_RealD_C1
Property and equipment, RealD Cinema Systems and digital projectors (Tables) | 6 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Property and equipment, RealD Cinema Systems and digital projectors | ' | |||||||
Schedule of property and equipment of RealD Cinema Systems and digital projectors | ' | |||||||
September 30, | March 31, | |||||||
(in thousands) | 2013 | 2013 | ||||||
RealD Cinema Systems | $ | 203,921 | $ | 194,527 | ||||
Digital projectors - held for sale | 944 | 1,634 | ||||||
Leasehold improvements | 17,329 | 14,442 | ||||||
Machinery and equipment | 7,322 | 6,198 | ||||||
Furniture and fixtures | 1,305 | 1,122 | ||||||
Computer equipment and software | 9,275 | 7,628 | ||||||
Construction in process | 35 | 2,637 | ||||||
Total | $ | 240,131 | $ | 228,188 | ||||
Less accumulated depreciation | -94,365 | -77,079 | ||||||
Property and equipment, RealD Cinema Systems and digital projectors, net | $ | 145,766 | $ | 151,109 |
Borrowings_Tables
Borrowings (Tables) | 6 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Borrowings | ' | |||||||
Schedule of the current and non-current portions of the Credit Agreement | ' | |||||||
September 30, | March 31, | |||||||
2013 | 2013 | |||||||
(in thousands) | (unaudited) | |||||||
Current portion of Credit Agreement | $ | 12,500 | $ | 1,042 | ||||
Credit Agreement, net of current portion | 52,500 | 46,458 | ||||||
Total Credit Agreement | $ | 65,000 | $ | 47,500 | ||||
Schedule of future minimum Credit Agreement obligations | ' | |||||||
At September 30, 2013, our future minimum Credit Agreement obligations were as follows: | ||||||||
(in thousands) | ||||||||
Fiscal year 2014 | $ | 6,250 | ||||||
Fiscal year 2015 | 12,500 | |||||||
Fiscal year 2016 | 40,000 | |||||||
Fiscal year 2017 | 6,250 | |||||||
Total | $ | 65,000 |
Sharebased_compensation_Tables
Share-based compensation (Tables) | 6 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Share-based compensation | ' | ||||||||||||
Schedule of share-based compensation expense for all share-based arrangements | ' | ||||||||||||
Three months ended | Six months ended | ||||||||||||
September 30, | September 21, | September 30, | September 21, | ||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||
Share-based compensation | |||||||||||||
Cost of revenue | $ | 242 | $ | 267 | $ | 541 | $ | 444 | |||||
Research and development | 768 | 538 | 1,475 | 968 | |||||||||
Selling and marketing | 1,259 | 1,362 | 2,581 | 2,699 | |||||||||
General and administrative | 2,204 | 2,645 | 4,521 | 4,983 | |||||||||
Total | $ | 4,473 | $ | 4,812 | $ | 9,118 | $ | 9,094 |
Equity_Tables
Equity (Tables) | 6 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Equity | ' | |||||||||
Summary of the changes in total equity | ' | |||||||||
RealD Inc. | ||||||||||
stockholders’ | Noncontrolling | Total | ||||||||
(in thousands) | deficit | interest | equity (deficit) | |||||||
Balance, March 31, 2013 | $ | 149,963 | $ | -774 | $ | 149,189 | ||||
Share-based compensation | 9,118 | - | 9,118 | |||||||
Exercise of stock options | 1,079 | - | 1,079 | |||||||
Purchase and distribution of stock under employee stock purchase plan | 303 | - | 303 | |||||||
Purchases of treasury stock | -7,511 | - | -7,511 | |||||||
Other comprehensive loss, net of tax | 205 | - | 205 | |||||||
Net loss | -6,185 | -15 | -6,200 | |||||||
Balance, September 30, 2013 | $ | 146,972 | $ | -789 | $ | 146,183 |
Subsequent_events_Tables
Subsequent events (Tables) | 6 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Subsequent events | ' | ||||||||||||
Summary of one-time charges resulting from the cost reduction plan implementation | ' | ||||||||||||
Estimated termination and implementation charges | |||||||||||||
(in thousands) | Personnel | Lease | Impairment | Total | |||||||||
Cost of revenue | $ | 842 | $ | 800 | $ | 100 | $ | 1,742 | |||||
Research and development | 755 | 0 | 0 | 755 | |||||||||
Selling and marketing | 1,995 | 0 | 0 | 1,995 | |||||||||
General and administrative | 1,256 | 0 | 0 | 1,256 | |||||||||
Total | $ | 4,848 | $ | 800 | $ | 100 | $ | 5,748 | |||||
Summary_of_significant_account3
Summary of significant accounting policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Mar. 31, 2013 |
item | item | item | |||
Accounting period | ' | ' | ' | ' | ' |
Number of period in an accounting period | 4 | ' | 4 | ' | 4 |
Length of quarter | ' | ' | '3 months | ' | '91 days |
Length of fiscal year | ' | ' | '12 months | ' | '364 days |
Numerator: | ' | ' | ' | ' | ' |
Net loss | ($4,664) | ($4,231) | ($6,200) | ($1,284) | ' |
Net loss attributable to noncontrolling interest | 13 | 58 | 15 | 90 | ' |
Net loss attributable to RealD Inc. common stockholders | ($4,651) | ($4,173) | ($6,185) | ($1,194) | ' |
Denominator: | ' | ' | ' | ' | ' |
Weighted-average common shares outstanding (basic) | 49,260 | 53,915 | 49,479 | 54,314 | ' |
Weighted-average common shares outstanding (diluted) | 49,260 | 53,915 | 49,479 | 54,314 | ' |
Loss per common share: | ' | ' | ' | ' | ' |
Basic (in dollars per share) | ($0.09) | ($0.08) | ($0.13) | ($0.02) | ' |
Diluted (in dollars per share) | ($0.09) | ($0.08) | ($0.13) | ($0.02) | ' |
Options, employee stock purchase plan, restricted stock units and warrants to purchase common stock | ' | ' | ' | ' | ' |
Loss per share of common stock | ' | ' | ' | ' | ' |
Weighted-average number of anti-dilutive shares excluded from the calculation of diluted loss per common share | 9,612 | 9,467 | 9,741 | 7,451 | ' |
Summary_of_significant_account4
Summary of significant accounting policies (Details 2) (USD $) | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
In Millions, unless otherwise specified | Designated as hedging instrument | Foreign currency forward contract | ||
item | Not designated as hedging instrument | |||
Level 2 | ||||
item | ||||
Derivative instruments | ' | ' | ' | ' |
Number of derivative instruments | ' | ' | 0 | 0 |
Foreign currency forward contracts, maturity period | ' | ' | ' | '6 months |
Gross receivable | ' | ' | ' | $0 |
Gross payable | ' | ' | ' | 0 |
Accounts receivable | ' | ' | ' | ' |
Allowance for doubtful accounts and customer credits | 3 | 2.6 | ' | ' |
Inventories and deferred costs-eyewear | ' | ' | ' | ' |
Inventory reserve | $0.30 | $0.40 | ' | ' |
Summary_of_significant_account5
Summary of significant accounting policies (Details 3) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 |
Comprehensive Income (Loss) | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive income (loss) | $0 | $0 | $0 | $0 |
Shipping and handling costs | ' | ' | ' | ' |
Shipping and handling costs | 1.7 | 2.4 | 3.9 | 4.7 |
RealD Cinema Systems | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' |
Impairment charges | $1.80 | $4.30 | $2.80 | $5.90 |
Property_and_equipment_RealD_C2
Property and equipment, RealD Cinema Systems and digital projectors (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Mar. 31, 2013 | |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | $240,131,000 | ' | $240,131,000 | ' | $228,188,000 |
Less accumulated depreciation | -94,365,000 | ' | -94,365,000 | ' | -77,079,000 |
Property and equipment, RealD Cinema Systems and digital projectors, net | 145,766,000 | ' | 145,766,000 | ' | 151,109,000 |
Depreciation expense | 9,900,000 | 8,000,000 | 19,100,000 | 15,900,000 | ' |
Cash received from motion picture exhibitor customers for the sale of digital projectors | ' | ' | 70,000 | 2,474,000 | ' |
Cinema systems configurations under non-cancellable purchase commitment | ' | ' | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' | ' | ' |
Aggregate amount of non-cancellable purchase commitment for certain cinema systems configurations not fully recoverable | ' | 3,500,000 | ' | ' | ' |
Impairment charges including related purchase commitments | ' | 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 | 203,921,000 | ' | 203,921,000 | ' | 194,527,000 |
Impairment charges including related purchase commitments | 1,800,000 | 4,300,000 | 2,800,000 | 5,900,000 | ' |
Digital projectors - held for sale | ' | ' | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 944,000 | ' | 944,000 | ' | 1,634,000 |
Leasehold improvements | ' | ' | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 17,329,000 | ' | 17,329,000 | ' | 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 | 7,322,000 | ' | 7,322,000 | ' | 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 | 1,305,000 | ' | 1,305,000 | ' | 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 | 9,275,000 | ' | 9,275,000 | ' | 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 | $35,000 | ' | $35,000 | ' | $2,637,000 |
Borrowings_Details
Borrowings (Details) (USD $) | 0 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 0 Months Ended | ||||||||||||||
Apr. 19, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Mar. 31, 2013 | Oct. 23, 2013 | Oct. 16, 2013 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 19, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Jun. 22, 2012 | Dec. 31, 2013 | Apr. 19, 2012 | |
Subsequent event | Subsequent event | Revolving Facility | 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 | |||||
LIBOR | Prime Rate | Base Rate - Federal Funds Rate | Base Rate - Eurodollar Rate | Base Rate | Maximum | Subsequent event | Maximum | ||||||||||||||
Borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $75,000,000 | ' | ' | ' | ' | $50,000,000 |
Borrowings drawn | ' | 37,500,000 | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | 25,000,000 | ' | ' |
Borrowings repaid | ' | 20,000,000 | 37,500,000 | ' | 7,500,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,500,000 | ' | ' | ' |
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 | ' | 52,500,000 | ' | 46,458,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total Credit Agreement | ' | 65,000,000 | ' | 47,500,000 | ' | ' | 65,000,000 | ' | 65,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Twelve periodic payment of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,100,000 | ' |
Future minimum Credit Agreement obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2014 | ' | 6,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2015 | ' | 12,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2016 | ' | 40,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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 | ' | ' | ' | ' | ' | ' |
Interest rate added to base rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.50% | ' | 0.50% | 1.00% | 1.50% | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | 2.82% | ' | 2.82% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | $500,000 | $300,000 | $1,100,000 | $600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_contingencies_
Commitments and contingencies (Details) (Purchase Commitment, USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Indemnities and commitments | ' |
Future obligations | $6.80 |
Revolving supply commitments | '90 days |
Maximum | ' |
Indemnities and commitments | ' |
Payment required under the cancellation penalty provisions as a percentage of the unused contract | 20.00% |
Sharebased_compensation_Detail
Share-based compensation (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 |
Share-based compensation | ' | ' | ' | ' |
Share-based compensation expense | $4,473 | $4,812 | $9,118 | $9,094 |
Cost of revenue | ' | ' | ' | ' |
Share-based compensation | ' | ' | ' | ' |
Share-based compensation expense | 242 | 267 | 541 | 444 |
Research and development | ' | ' | ' | ' |
Share-based compensation | ' | ' | ' | ' |
Share-based compensation expense | 768 | 538 | 1,475 | 968 |
Selling and marketing | ' | ' | ' | ' |
Share-based compensation | ' | ' | ' | ' |
Share-based compensation expense | 1,259 | 1,362 | 2,581 | 2,699 |
General and administrative | ' | ' | ' | ' |
Share-based compensation | ' | ' | ' | ' |
Share-based compensation expense | $2,204 | $2,645 | $4,521 | $4,983 |
Sharebased_compensation_Detail1
Share-based compensation (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||
In Thousands, except Share data in Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Jun. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 30, 2013 |
Stock options | Stock options and employee stock purchase plan | Stock options and employee stock purchase plan | Stock options and employee stock purchase plan | Stock options and employee stock purchase plan | Performance stock options | Performance stock options | Performance stock options | Performance stock options | Performance stock options | Performance stock options | Performance stock units | Performance stock units | Performance stock units | Performance stock units | Performance stock units | Performance stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | |||||
Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | ||||||||||||||||||||||
Chief Executive Officer | Chief Executive Officer | ||||||||||||||||||||||||||
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting period | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | '3 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 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | ' | ' | 0.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average grant date fair value (in dollars per share) | ' | ' | ' | ' | $7.75 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.4 | ' | ' | ' |
Weighted average grant date fair value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $13.62 | ' | ' | ' |
Share-based compensation expense (in dollars) | $4,473 | $4,812 | $9,118 | $9,094 | ' | $3,500 | $3,600 | $7,100 | $7,000 | $100 | $500 | $500 | $900 | ' | ' | ($100) | $0 | $0 | $0 | ' | ' | $900 | $700 | $1,400 | $1,200 | ' | ' |
Performance period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | '3 years | '5 years | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of options earned depending on outcome of performance goals | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | 200.00% | ' | ' | ' | ' | ' | ' |
Income_taxes_Details
Income taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 |
Income taxes | ' | ' | ' | ' |
Income tax expense (benefit) | $1,552 | ($1,129) | $3,267 | $3,548 |
Equity_Details
Equity (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 18 Months Ended | |||
Dec. 14, 2012 | Apr. 20, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 21, 2012 | Sep. 30, 2013 | |
Balance | ' | ' | ' | ' | $149,189,000 | ' | ' |
Share-based compensation | ' | ' | ' | ' | 9,118,000 | ' | ' |
Exercise of stock options | ' | ' | ' | ' | 1,079,000 | ' | ' |
Purchase and distribution of stock under employee stock purchase plan | ' | ' | ' | ' | 303,000 | ' | ' |
Purchases of treasury stock | ' | ' | ' | ' | -7,511,000 | ' | ' |
Other comprehensive loss, net of tax | ' | ' | 68,000 | ' | 205,000 | ' | ' |
Net loss | ' | ' | -4,664,000 | -4,231,000 | -6,200,000 | -1,284,000 | ' |
Balance | ' | ' | 146,183,000 | ' | 146,183,000 | ' | 146,183,000 |
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 | ' | 671,997 | ' | 6,599,726 |
Average price per share of common stock (in dollars per share) | ' | ' | $11.18 | ' | $11.18 | ' | $10.30 |
Value of common stock repurchased | ' | ' | 7,500,000 | ' | 7,500,000 | ' | 68,000,000 |
RealD Inc. stockholders' deficit | ' | ' | ' | ' | ' | ' | ' |
Balance | ' | ' | ' | ' | 149,963,000 | ' | ' |
Share-based compensation | ' | ' | ' | ' | 9,118,000 | ' | ' |
Exercise of stock options | ' | ' | ' | ' | 1,079,000 | ' | ' |
Purchase and distribution of stock under employee stock purchase plan | ' | ' | ' | ' | 303,000 | ' | ' |
Purchases of treasury stock | ' | ' | ' | ' | -7,511,000 | ' | ' |
Other comprehensive loss, net of tax | ' | ' | ' | ' | 205,000 | ' | ' |
Net loss | ' | ' | ' | ' | -6,185,000 | ' | ' |
Balance | ' | ' | 146,972,000 | ' | 146,972,000 | ' | 146,972,000 |
Noncontrolling interest | ' | ' | ' | ' | ' | ' | ' |
Balance | ' | ' | ' | ' | -774,000 | ' | ' |
Net loss | ' | ' | ' | ' | -15,000 | ' | ' |
Balance | ' | ' | ($789,000) | ' | ($789,000) | ' | ($789,000) |
Relatedparty_transactions_Deta
Related-party transactions (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2013 | 19-May-11 | Sep. 21, 2012 | Sep. 21, 2012 | Jul. 16, 2011 | 19-May-11 | 19-May-11 | 29-May-12 | Sep. 21, 2012 | 29-May-12 | 29-May-12 | |
Joshua Greer | 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 | ' | ' | ' | ' | 180,000 | ' | ' | ' | ' | ' | ' | ' |
Amount paid pursuant to the consulting agreement | ' | ' | ' | 11,458 | 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 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000 | ' | ' |
Amount of related party transactions | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subsequent_events_Details
Subsequent events (Details) (USD $) | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 21, 2012 | Oct. 23, 2013 | Oct. 16, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 22, 2013 | Nov. 11, 2013 | |
Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | |||
Cost of revenue | Research and development | Selling and marketing | General and administrative | Anticipated | Facility closing | Facility closing | Facility closing | Facility closing | Facility closing | Minimum | Minimum | Maximum | Maximum | Employee severance | Employee severance | Employee severance | Employee severance | Employee severance | Employee severance | Employee severance | Joe Peixoto | Mr. Hamilton | ||||||
Cost of revenue | Research and development | Selling and marketing | General and administrative | Facility closing | Facility closing | Cost of revenue | Research and development | Selling and marketing | General and administrative | Minimum | Maximum | item | item | |||||||||||||||
Subsequent events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowings repaid | $20,000,000 | $37,500,000 | $7,500,000 | $5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash severance amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 937,500 | 300,000 |
Number of equal installments of cash severance to be paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18 | 12 |
Maximum period of reimbursement by the entity for insurance coverage under COBRA under the terms of the separation agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '12 months | '12 months |
Relocation allowance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000 |
Period for which equity incentive grants will be continued after the termination date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '12 months | ' |
Period for which equity incentive grants will remain exercisable after the termination date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '24 months | ' |
Period after which the second general release of all claims against the company and its affiliates and representatives is to be executed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '60 days | '60 days |
Annual cost savings | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual cost savings due to implementation of the cost reduction plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost reduction plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of staff reduced under the cost reduction plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Charges related to staff reduced | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,848,000 | 842,000 | 755,000 | 1,995,000 | 1,256,000 | 4,400,000 | 4,900,000 | ' | ' |
Charges related to manufacturing facilities not in operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 | 800,000 | 0 | 0 | 0 | ' | 500,000 | ' | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total charges associated with the cost reduction plan | ' | ' | ' | ' | 5,748,000 | 1,742,000 | 755,000 | 1,995,000 | 1,256,000 | ' | ' | ' | ' | ' | ' | 4,900,000 | ' | 5,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
One-time termination charges | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Personnel | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,848,000 | 842,000 | 755,000 | 1,995,000 | 1,256,000 | 4,400,000 | 4,900,000 | ' | ' |
Lease | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 | 800,000 | 0 | 0 | 0 | ' | 500,000 | ' | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment | 2,783,000 | 5,901,000 | ' | ' | 100,000 | 100,000 | 0 | 0 | 0 | 7,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | ' | ' | ' | ' | $5,748,000 | $1,742,000 | $755,000 | $1,995,000 | $1,256,000 | ' | ' | ' | ' | ' | ' | $4,900,000 | ' | $5,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |