Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Jun. 30, 2014 | Jul. 29, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'RealD Inc. | ' |
Entity Central Index Key | '0001327471 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
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 | ' | 49,984,443 |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Condensed_consolidated_balance
Condensed consolidated balance sheets (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $27,841 | $28,800 |
Accounts receivable, net | 59,818 | 48,422 |
Inventories | 7,807 | 9,109 |
Deferred costs - eyewear | 713 | 149 |
Prepaid expenses and other current assets | 4,834 | 5,197 |
Total current assets | 101,013 | 91,677 |
Property and equipment, net | 23,758 | 22,491 |
Cinema systems, net | 100,355 | 106,735 |
Digital projectors, net-held for sale | ' | 57 |
Goodwill | 10,657 | 10,657 |
Other intangibles, net | 5,837 | 6,154 |
Deferred income taxes | 4,571 | 4,571 |
Other assets | 7,230 | 4,840 |
Total assets | 253,421 | 247,182 |
Current liabilities: | ' | ' |
Accounts payable | 11,989 | 12,470 |
Accrued expenses and other liabilities | 20,505 | 21,896 |
Deferred revenue | 7,046 | 8,143 |
Income taxes payable | 1,351 | 1,790 |
Deferred income taxes | 4,287 | 4,288 |
Current portion of Credit Agreement | 7,460 | 12,500 |
Total current liabilities | 52,638 | 61,087 |
Credit Agreement, net of current portion | 27,975 | 23,750 |
Deferred revenue, net of current portion | 5,649 | 6,465 |
Other long-term liabilities, customer deposits and virtual print fee liability | 4,844 | 5,046 |
Total liabilities | 91,106 | 96,348 |
Commitments and contingencies | ' | ' |
Equity (deficit) | ' | ' |
Common stock, $0.0001 par value, 200,000 shares authorized; 49,905 and 49,438 shares issued and outstanding at December 31, 2013 and March 31, 2013, respectively | 358,894 | 352,913 |
Accumulated deficit | -196,262 | -201,763 |
Accumulated other comprehensive income | 261 | 262 |
Total RealD Inc. stockholders' equity | 162,893 | 151,412 |
Noncontrolling interest | -578 | -578 |
Total equity | 162,315 | 150,834 |
Total liabilities and equity | $253,421 | $247,182 |
Condensed_consolidated_balance1
Condensed consolidated balance sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
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 | ' |
Common stock, shares issued | 49,905 | 49,438 |
Common stock, shares outstanding | 49,905 | 49,438 |
Condensed_consolidated_stateme
Condensed consolidated statements of operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Revenue: | ' | ' |
License | $35,973 | $37,306 |
Product and other | 19,406 | 21,913 |
Total revenue | 55,379 | 59,219 |
Cost of revenue: | ' | ' |
License | 10,897 | 10,818 |
Product and other | 14,499 | 20,220 |
Total cost of revenue | 25,396 | 31,038 |
Gross profit | 29,983 | 28,181 |
Operating expenses: | ' | ' |
Research and development | 3,790 | 5,544 |
Selling and marketing | 5,791 | 7,338 |
General and administrative | 12,344 | 14,422 |
Total operating expenses | 21,925 | 27,304 |
Operating income (loss) | 8,058 | 877 |
Interest expense, net | -430 | -489 |
Other income (loss) | 160 | -209 |
Income (loss) before income taxes | 7,788 | 179 |
Income tax expense (benefit) | 2,287 | 1,715 |
Net income (loss) | 5,501 | -1,536 |
Net (income) loss attributable to noncontrolling interest | ' | 2 |
Net income (loss) attributable to RealD Inc. common stockholders | $5,501 | ($1,534) |
Earnings (loss) per common share: | ' | ' |
Basic (in dollars per share) | $0.11 | ($0.03) |
Diluted (in dollars per share) | $0.10 | ($0.03) |
Shares used in computing earnings (loss) per common share: | ' | ' |
Basic (in shares) | 49,671 | 49,588 |
Diluted (in shares) | 52,770 | 49,588 |
Condensed_consolidated_stateme1
Condensed consolidated statements of comprehensive income (loss) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Condensed consolidated statements of comprehensive income (loss) | ' | ' |
Net income (loss) | $5,501 | ($1,536) |
Other comprehensive income (loss), net of tax: | ' | ' |
Foreign currency translation gains (loss) | -1 | 137 |
Other comprehensive income (loss), net of tax | -1 | 137 |
Comprehensive income (loss) | $5,500 | ($1,399) |
Condensed_consolidated_stateme2
Condensed consolidated statements of cash flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities | ' | ' |
Net income (loss) | $5,501 | ($1,536) |
Adjustments to reconcile net income (loss) to net cash provided (used) by operating | ' | ' |
Depreciation and amortization | 9,813 | 9,554 |
Deferred income tax | -1 | -1 |
Non-cash interest expense | 38 | 20 |
Non-cash stock compensation | 3,971 | 4,645 |
Gain on sale of digital projectors | ' | -18 |
Loss on disposal of property and equipment | 9 | ' |
Impairment of long-lived assets and related purchase commitments | 1,016 | 953 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -11,396 | -9,972 |
Inventories | 1,302 | -3,839 |
Prepaid expenses and other current assets | 1,273 | -2,018 |
Deferred costs - eyewear | -564 | 97 |
Other assets | -2,390 | 172 |
Accounts payable | -468 | -4,637 |
Accrued expenses and other liabilities | -1,429 | -399 |
Other long-term liabilities and customer deposits | -202 | 744 |
Income taxes receivable/payable | -454 | 535 |
Deferred revenue | -1,913 | -3,015 |
Net cash provided (used) by operating activities | 4,106 | -8,715 |
Cash flows from investing activities | ' | ' |
Purchases of property and equipment | -2,632 | -1,636 |
Purchases of cinema systems and related components | -2,799 | -8,428 |
Proceeds from sale of property and equipment | 67 | ' |
Proceeds from sale of digital projectors | ' | 70 |
Net cash used in investing activities | -5,364 | -9,994 |
Cash flows from financing activities | ' | ' |
Proceeds from Credit Agreement | 37,300 | 5,000 |
Repayments on Credit Agreement | -38,115 | ' |
Payments of debt issuance costs | -895 | ' |
Proceeds from exercise of stock options | 2,010 | 951 |
Net cash provided by financing activities | 300 | 5,951 |
Effect of currency exchange rate changes on cash and cash equivalent | -1 | 137 |
Net increase (decrease) in cash and cash equivalents | -959 | -12,621 |
Cash and cash equivalents, beginning of period | 28,800 | 31,020 |
Cash and cash equivalents, end of period | $27,841 | $18,399 |
Business_and_basis_of_presenta
Business and basis of presentation | 3 Months Ended |
Jun. 30, 2014 | |
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 June 30, 2014 refers to RealD Inc. and its subsidiaries. | |
The accompanying unaudited condensed consolidated financial statements as of June 30, 2014 and for the three months ended June 30, 2014 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 the Company’s condensed consolidated financial statements. Accordingly, certain information and footnote disclosure normally included in comprehensive financial statements have been condensed or omitted pursuant to such rules and regulations. The consolidated balance sheet as of March 31, 2014 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP. Interim results are not necessarily indicative of results for any subsequent quarter, the full fiscal year or any future periods. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended March 31, 2014. | |
The condensed consolidated financial statements include the accounts of RealD, its wholly owned subsidiaries and its majority owned subsidiaries. RealD does 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 | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Summary of significant accounting policies | ' | |||||||
Summary of significant accounting policies | ' | |||||||
2. Summary of significant accounting policies | ||||||||
Accounting period | ||||||||
The Company’s fiscal year consists of four 3-month periods for a total of 12 calendar months and will end on March 31, 2015. | ||||||||
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. The most significant estimates made by management in the preparation of the financial statements relate to the following: | ||||||||
· | licensing revenue terms applied to the timing and number of motion picture exhibitor consumer admissions; | |||||||
· | domestic eyewear product revenue terms applied to when the usage occurs and the amount of usage; | |||||||
· | impairment testing of goodwill, intangible assets and tangible assets, including determination of relevant reporting units and long-lived asset groups; | |||||||
· | useful lives of intangible assets and tangible assets; | |||||||
· | timing and amount recognized for performance-based compensation, including bonus and certain restricted share units, based on projections of Company performance achievement; | |||||||
· | the impact of potential future tax consequences of events that have been recognized in the Company’s financial statements; and | |||||||
· | assumptions used in the determination of the fair value of equity-based awards for stock-based compensation. | |||||||
· | ||||||||
Earnings (loss) per share of common stock | ||||||||
Basic income per share of common stock is computed by dividing the net income (loss) attributable to the Company’s 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 the Company’s 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 the Company’s employee stock purchase plan and unvested restricted stock units. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. | ||||||||
The calculation of the basic and diluted earnings (loss) per share of common stock for the three months ended June 30, 2014 and June 30, 2013 was as follows: | ||||||||
Three months ended | ||||||||
June 30, | June 30, | |||||||
(in thousands, except share and per share data) | 2014 | 2013 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | 5,501 | $ | -1,536 | ||||
Net loss attributable to noncontrolling interest | - | 2 | ||||||
Net income (loss) attributable to RealD Inc. common stockholders | $ | 5,501 | $ | -1,534 | ||||
Denominator: | ||||||||
Weighted-average common shares outstanding (basic) | 49,671 | 49,588 | ||||||
Effect of dilutive securities | 3,099 | – | ||||||
Weighted-average common shares outstanding (diluted) | 52,770 | 49,588 | ||||||
Earnings (loss) per common share: | ||||||||
Basic | $ | 0.11 | $ | -0.03 | ||||
Diluted | $ | 0.10 | $ | -0.03 | ||||
The weighted-average number of anti-dilutive shares excluded from the calculation of diluted earnings (loss) per common share for the three months ended June 30, 2014 and June 30, 2013 was as follows: | ||||||||
Three months ended | ||||||||
June 30, | June 30, | |||||||
(in thousands) | 2014 | 2013 | ||||||
Options, employee stock purchase plan, restricted stock units and warrants to purchase common stock | 9,394 | 9,871 | ||||||
Due to the loss attributable to the Company’s common stockholders in the three months ended June 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 | ||||||||
The Company’s 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 the Company’s condensed consolidated statements of operations. For all periods presented, none of the Company’s derivative instruments were designated as hedging instruments. The Company does not use foreign currency option or foreign exchange forward contracts for speculative or trading purposes. | ||||||||
The Company purchases foreign currency forward contracts, generally with maturities of nine months or less, to reduce the volatility of cash flows primarily related to forecasted payments and expenses denominated in certain foreign currencies. As of June 30, 2014, RealD had no outstanding forward contracts. As of March 31, 2014, the carrying amounts of the Company’s foreign currency forward contracts were not significant. For both the three months ended June 30, 2014 and June 30, 2013, the net loss related to the change in fair value of the Company’s foreign currency forward contracts was not significant. Foreign currency master agreements typically allow the netting of receivables and payables. The Company had no gross receivable balances or gross payable balances as of June 30, 2014 and any such amounts were not significant as of March 31, 2014. | ||||||||
Accounts receivable | ||||||||
Accounts receivable consists of trade receivables, value-added tax (“VAT”) receivables and other receivables. The Company provides credit to its customers, who are primarily in the movie production and exhibition businesses. The Company provides 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 the Company’s overall credit risk. The allowance for doubtful accounts and customer credits totaled $4.6 million and $3.2 million as of June 30, 2014 and March 31, 2014, 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, the Company evaluates ending inventories and deferred costs-eyewear for net realizable value. The Company also evaluates 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, RealD maintains reserves against such inventories. If the Company’s 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 June 30, 2014 and March 31, 2014, the inventory reserve as a result of the Company’s net realizable value analyses was $0.1 million and $0.6 million, respectively. | ||||||||
Domestically, the Company provides RealD eyewear free of charge to motion picture exhibitors and then receives a fee from the motion picture studios for the usage of RealD eyewear by the motion picture exhibitors’ consumers. Eyewear shipped from inventory is deferred on the shipment date and then amortized to cost of product revenue according to assumptions related to eyewear usage by consumers. | ||||||||
Impairment of long-lived assets | ||||||||
The Company reviews 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 June 30, 2014 and June 30, 2013, impairment charges for all impaired RealD Cinema Systems charged to cost of revenue totaled $1.0 million, respectively. | ||||||||
Revenue recognition | ||||||||
The Company derives substantially all of its revenue from the license of RealD Cinema Systems and the product sale of RealD eyewear. RealD evaluates revenue recognition for transactions using the criteria set forth by the Financial Accounting Standard Board Accounting Standards Codification Topic 840, Leases, and Accounting Standards Codification Topic 605, Revenue Recognition. 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. The Company records revenue net of estimated allowances. | ||||||||
License revenue | ||||||||
License revenue, net of allowances, 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 the Company’s control, including those related to admission and usage, are recognized as revenues when the contingency is resolved and the Company has no more obligations to our customers specific to the contingent payment received. Certain of the Company’s license revenue from leasing RealD Cinema Systems is earned upon admission by the motion picture exhibitor’s consumers. The Company’s licensees, however, do not report and pay for such license revenue until after the admission has occurred, which may be received subsequent to the Company’s fiscal period end. The Company estimates and records 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. The Company determines 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. The Company determines collectability based on an evaluation of the licensee’s recent payment history and evaluation of the respective customer’s credit-standing. | ||||||||
Product revenue | ||||||||
The Company recognizes 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 the Company’s product revenue from the sale of RealD eyewear is earned upon admission and usage by the motion picture exhibitor’s consumers. The Company’s 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 the Company’s fiscal period end. Accordingly, the Company estimates and records 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 months ended June 30, 2014 and June 30, 2013. | ||||||||
Shipping and handling costs | ||||||||
Amounts billed to customers for shipping and handling costs are included in revenue. RealD’s shipping and handling costs consists primarily of packaging and transportation charges and are recorded in cost of revenue. Shipping and handling costs recognized in cost of revenue were $2.3 million and $1.7 million for the three months ended June 30, 2014 and June 30, 2013, respectively. | ||||||||
Recent accounting pronouncements | ||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, effective for RealD as of April 1, 2017 (the first quarter of fiscal year 2018). The new standard will be implemented retrospectively with the Company choosing to either restate prior periods or recognize the cumulative effect. The new Topic 606 does not apply to lease contracts within the scope of Topic 840 leases. The objective of ASU 2014-09 is to provide guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. This ASU will supersede the revenue recognition requirements in Topic 605, “Revenue Recognition”, and most industry-specific guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. The Company is currently evaluating the impact of the adoption of this accounting standard update on its consolidated financial statements. | ||||||||
Property_and_equipment_RealD_C
Property and equipment, RealD Cinema Systems and digital projectors | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Property and equipment, RealD Cinema Systems and digital projectors | ' | |||||||
Property and equipment, RealD Cinema Systems and digital projectors | ' | |||||||
3. Property and equipment, RealD Cinema Systems and digital projectors | ||||||||
Property and equipment, RealD Cinema Systems and digital projectors consist of the following: | ||||||||
June 30, | March 31, | |||||||
(in thousands) | 2014 | 2014 | ||||||
RealD Cinema Systems | $ | 206,012 | $ | 205,416 | ||||
Digital projectors - held for sale | - | 216 | ||||||
Leasehold improvements | 16,937 | 16,935 | ||||||
Machinery and equipment | 4,699 | 4,753 | ||||||
Furniture and fixtures | 1,272 | 1,272 | ||||||
Computer equipment and software | 9,253 | 9,197 | ||||||
Construction in process | 4,125 | 1,554 | ||||||
Total | $ | 242,298 | $ | 239,343 | ||||
Less accumulated depreciation | -118,185 | -110,060 | ||||||
Property and equipment, RealD Cinema Systems and digital projectors, net | $ | 124,113 | $ | 129,283 | ||||
Depreciation expense amounted to $9.5 million and $9.2 million for the three months ended June 30, 2014 and June 30, 2013, respectively. | ||||||||
During the three months ended June 30, 2013, the Company received $0.1 million in cash from motion picture exhibitor customers for the sale of digital projectors. There were no such similar sales during the three months ended June 30, 2014. | ||||||||
Cost_reduction_plan
Cost reduction plan | 3 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Cost reduction plan | ' | ||||||||||
Cost reduction plan | ' | ||||||||||
4. 2014 Cost reduction plan | |||||||||||
On November 12, 2013, the Company announced a plan to reduce the overall costs of its global operations (the “2014 Cost Reduction Plan”) while continuing to make significant research and development investments and build the framework for the Company’s future growth. The 2014 Cost Reduction Plan was primarily a response to the anticipated impact on the Company’s financial results and operations caused by changes in the 3D box office performance of certain motion pictures due to perceived changes in consumer preference and the fact that the Company’s 3D cinema business is maturing in many markets like the United States in which the Company expected equipment installations to begin to slow. As a result of the 2014 Cost Reduction Plan, the Company reduced its staff by approximately 20%, rescoped and made other changes to certain research and development projects, reduced certain non-personnel related general and administrative expenses and streamlined certain manufacturing operations. These actions were intended to rationalize the further expansion of the Company’s global cinema platform by focusing on emerging growth markets and higher performing circuits, streamlining the Company’s manufacturing facilities to achieve cost efficiencies while meeting the future commercial demands of the Company’s customers and focusing the Company’s research and development efforts on technologies that would enable the Company to expand its visual technology product offerings. | |||||||||||
The Company accounts for the 2014 Cost Reduction Plan in accordance with the Accounting Standards Codification (ASC), including ASC 420 Exit or Disposal Cost Obligations, ASC 712 Compensation-Nonretirement Postemployment Benefits and ASC 360 Property, Plant and Equipment (Impairment or Disposal of Long-Lived Assets). As a result of the 2014 Cost Reduction Plan’s workforce reduction, the Company incurred termination and related charges totaling approximately $4.7 million for the year ended March 31, 2014. Additionally, the Company expects to incur approximately $0.6 million during the current fiscal year in other charges principally related to the accrual of losses for a lease for certain manufacturing facilities that will no longer be used in the Company’s operations. Therefore, the total charges associated with the 2014 Cost Reduction Plan currently are estimated to be approximately $5.3 to $5.9 million, of which $4.8 million has been incurred through June 30, 2014. The following table summarizes the charges resulting from implementation of the 2014 Cost Reduction Plan during the three months ended June 30, 2014: | |||||||||||
Three months ended June 30, 2014 | |||||||||||
(in thousands) | Personnel | Leasehold | Total | ||||||||
Cost of revenue | $ | - | $ | 71 | $ | 71 | |||||
Research and development | - | - | - | ||||||||
Selling and marketing | - | - | - | ||||||||
General and administrative | - | - | - | ||||||||
Total | $ | - | $ | 71 | $ | 71 | |||||
The following table summarizes the activity resulting from implementation of the 2014 Cost Reduction Plan within accrued expenses and other liabilities: | |||||||||||
Payments excluding non-cash impairment | |||||||||||
(in thousands) | Personnel | Leasehold | Total | ||||||||
Cost reduction plan liabilities as of March 31, 2014 | $ | 1,416 | $ | - | $ | 1,416 | |||||
Charges | - | 71 | 71 | ||||||||
(Payments) | -209 | -71 | -280 | ||||||||
Cost reduction plan liabilities as of June 30, 2014 | $ | 1,207 | $ | - | $ | 1,207 | |||||
Additionally, the Company has certain office space that includes approximately $7.0 million in leasehold improvements included within fixed assets (see Note 3 “Property and equipment, RealD Cinema Systems and digital projectors”), which could become subject to an impairment assessment upon a future change in circumstances. | |||||||||||
Borrowings_and_Credit_Agreemen
Borrowings and Credit Agreement | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Borrowings and Credit Agreement | ' | |||||||
Borrowings and Credit Agreement | ' | |||||||
5. Borrowings | ||||||||
2014 Credit Agreement | ||||||||
On June 26, 2014, RealD entered into the Amended and Restated Credit Agreement (the “2014 Credit Agreement”), by and among the Company, as borrower, City National Bank, as administrative agent and letter of credit issuer (“City National”), the other agents from time to time party thereto and the lenders from time to time party thereto (the “Lenders”). The 2014 Credit Agreement amends and restates in its entirety that certain Credit Agreement, dated as of April 19, 2012, by and among the Company, City National and the agents and lenders from time to time party thereto, which had been most recently amended on October 16, 2013. | ||||||||
Pursuant to the 2014 Credit Agreement, the Lenders thereunder will make available to RealD: | ||||||||
· | a revolving credit facility (including a letter of credit sub-facility) in a maximum amount not to exceed $50 million (the “Revolving Facility”), which matures on June 26, 2017. In addition, the Company may request up to an additional $25 million of commitments under the Revolving Facility (such that the maximum amount of all commitments under the Revolving Facility may not exceed $75 million), subject to the satisfaction of certain financial and other conditions and subject to obtaining such commitments; and | |||||||
· | a delayed draw term loan facility in a maximum amount not to exceed $50 million (the “Term Loan Facility”), which matures on June 26, 2018. During the first quarter of fiscal year 2015, the Company borrowed $37.3 million under the Term Loan Facility, resulting in $12.7 million being available for future draws through June 26, 2016. | |||||||
Debt issuance costs related to the completion of the 2014 Credit Agreement totaled $0.9 million and were added to the $0.3 million deferred charge remaining on the April 19, 2012 credit agreement. All these issuance costs are being amortized over the contractual life of the agreement and recorded as interest expense. | ||||||||
Loans outstanding under the 2014 Credit Agreement bear interest at the Company’s option at either the Eurocurrency rate plus a margin ranging from 2.25% to 2.75% per year or the base rate (the highest of (i) the Federal Funds rate plus 0.50%, (ii) City National’s prime rate or (iii) the Eurocurrency rate for a one month Interest Period on such day plus 1.00%) plus a margin ranging from 1.25% to 1.75% per year. The applicable margin for loans varies depending on the Company’s leverage ratio. Under the 2014 Credit Agreement, the Company is charged a commitment fee on the unused portions of the Revolving Facility and Term Loan Facility. The fee for the unused Revolving Facility varies between 0.250% and 0.375% per year depending on the percentage of the Revolving Facility in use. The fee for the unused Term Loan Facility is 0.375% of the unused commitment. Additionally, the Company is charged a letter of credit fee between 2.25% to 2.75%, depending on the Company’s leverage ratio, per year with respect to the amount of each performance letter of credit issued under the 2014 Credit Agreement. The Company also pays customary fronting fees and other fees and expenses in connection with the issuance of letters of credit under the 2014 Credit Agreement. There were no letters of credit outstanding at June 30, 2014 and March 31, 2014. | ||||||||
The obligations under the 2014 Credit Agreement are fully and unconditionally guaranteed by the Company’s subsidiaries, ColorLink Inc., a Delaware corporation (“ColorLink”), Stereographics Corporation, a California corporation (“Stereographics”), and RealD DDMG Acquisition, LLC, a Delaware limited liability company (together with the Company, ColorLink and Stereographics, the “Loan Parties”). The obligations under the 2014 Credit Agreement are secured by a first priority security interest in substantially all of the Loan Parties’ tangible and intangible assets. | ||||||||
As of June 30, 2014, $50 million was available under the Revolving Facility and $12.7 million was available under the Term Loan Facility, a total of $62.7 million available under the 2014 Credit Agreement. | ||||||||
As of June 30, 2014, there was no balance outstanding under the Revolving Facility. On June 30, 2014, the first quarterly term loan installment of $1.9 million was made on the Term Loan Facility. The term loan outstanding balance of $35.4 million at June 30, 2014 is to be repaid in 15 quarterly installments of $1.9 million through March 31, 2018 and the remaining $7.5 million principal on June 26, 2018. The current and non-current portions of the Credit Agreement due as of June 30, 2014 and March 31, 2014 were as follows: | ||||||||
June 30, | March 31, | |||||||
2014 | 2014 | |||||||
(in thousands) | ||||||||
Current portion of Credit Agreement | $ | 7,460 | $ | 12,500 | ||||
Credit Agreement, net of current portion | 27,975 | 23,750 | ||||||
Total Credit Agreement | 35,435 | 36,250 | ||||||
At June 30, 2014, the Company’s future minimum 2014 Credit Agreement obligations were as follows: | ||||||||
Fiscal year 2015 | $ | 5,595 | ||||||
Fiscal year 2016 | 7,460 | |||||||
Fiscal year 2017 | 7,460 | |||||||
Fiscal year 2018 | 7,460 | |||||||
Fiscal year 2019 | 7,460 | |||||||
Total | $ | 35,435 | ||||||
As of June 30, 2014, borrowings outstanding under the 2014 Credit Agreement bear interest at 2.69%. As of March 31, 2014, there were $36.3 million in borrowings outstanding under the 2014 Credit Agreement which bore interest at 2.88%. Interest expense related to our borrowings under the 2014 Credit Agreement was $0.2 million and $0.4 million for the three months ended June 30, 2014 and June 30, 2013, respectively. | ||||||||
Under the 2014 Credit Agreement, RealD’s business is subject to certain limitations, including limitations on the Company’s ability to incur additional debt, make certain investments or acquisitions, enter into certain merger and consolidation transactions, and sell its assets other than in the ordinary course of business. The Company is also required to maintain compliance with certain financial covenants, including a minimum fixed charge coverage ratio and a maximum leverage ratio. As of June 30, 2014, RealD was in compliance with all financial covenants in our Credit Agreement. If the Company fails to comply with any of the covenants or if any other event of default, as defined in the 2014 Credit Agreement, should occur, the bank lenders could elect to prevent the Company from borrowing and declare the indebtedness to be immediately due and payable. | ||||||||
The 2014 Credit Agreement contains customary events of default applicable to the Company and/or its subsidiaries, including, among other things the occurrence of any change of control. If one or more events of default occurs and continues beyond any applicable cure period, City National may, with the consent of the Lenders holding a majority of the loans and commitments under the facilities, or will, at the request of such Lenders, terminate the commitments of the Lenders to make further loans and declare all of the obligations of the Loan Parties under the 2014 Credit Agreement to be immediately due and payable. | ||||||||
Commitments_and_contingencies
Commitments and contingencies | 3 Months Ended |
Jun. 30, 2014 | |
Commitments and contingencies | ' |
Commitments and contingencies | ' |
6. Commitments and contingencies | |
Indemnities and commitments | |
During the ordinary course of business, the Company makes certain indemnities and commitments under which it 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 the Company’s 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 the Company could be obligated to make. The Company has not recorded any liability for these indemnities and commitments in the accompanying condensed consolidated balance sheets. The Company does, 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. | |
The Company has entered into contracts with certain of its vendors. Future obligations under such contracts totaled $6.3 million at June 30, 2014 and include revolving 90-day supply commitments. Many of the contracts contain cancellation penalty provisions requiring payment of up to 20.0% of the unused contract. | |
Contingencies and assessments | |
The Company is subject to various loss contingencies and assessments arising in the course of its business, some of which relate to litigation, claims, property taxes and sales and use tax or goods and services tax assessments. The Company considers the likelihood of the loss or the incurrence of a liability, as well as the Company’s 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. The Company regularly evaluates 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 the Company’s business, consolidated results of operations, financial condition or cash flows. | |
Sharebased_compensation
Share-based compensation | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Share-based compensation | ' | |||||||
Share-based compensation | ' | |||||||
7. Share-based compensation | ||||||||
The Company accounts for share-based payment awards granted to employees and directors by recording compensation expense based on estimated fair values. The Company estimates 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 the Company’s consolidated statements of operations. Share-based awards are attributed to expense using the straight-line method over the vesting period. The Company determines 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 the Company’s best estimates. The Company’s 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 modifications, estimates of forfeitures, and the related income tax impact. | ||||||||
Share-based compensation expense for all share-based arrangements for the three months ended June 30, 2014 and June 30, 2013 was as follows: | ||||||||
Three months ended | ||||||||
June 30, | June 30, | |||||||
(in thousands) | 2014 | 2013 | ||||||
Share-based compensation | ||||||||
Cost of revenue | $ | 191 | $ | 299 | ||||
Research and development | 626 | 707 | ||||||
Selling and marketing | 927 | 1,322 | ||||||
General and administrative | 2,227 | 2,317 | ||||||
Total | $ | 3,971 | $ | 4,645 | ||||
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 three months ended June 30, 2014, the Company granted 0.4 million stock options at a weighted average grant date fair value of $6.21 per share. For the three months ended June 30, 2014 and June 30, 2013, share-based compensation expense related to stock options and the Company’s employee stock purchase plan was $2.8 million and $3.5 million, respectively. | ||||||||
Certain of the Company’s 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 the Company’s 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, the Company’s 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 the Company’s 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 June 30, 2014 and June 30, 2013, share-based compensation expense related to performance stock options was $0 and $0.5 million, respectively. | ||||||||
Certain of the Company’s 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 months ended June 30, 2014, share-based compensation related to performance stock units was $0.1 million. For the three months ended June 30, 2013, share-based compensation related to performance stock units was $0.1 million. | ||||||||
Certain of the Company’s 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 three months ended June 30, 2014, the Company granted 1.0 million restricted stock units at a weighted average grant date fair value of $11.42 per restricted stock unit. For the three months ended June 30, 2014 and June 30, 2013, share-based compensation expense related to restricted stock units was $1.2 million and $0.5 million, respectively. | ||||||||
Income_taxes
Income taxes | 3 Months Ended |
Jun. 30, 2014 | |
Income taxes | ' |
Income taxes | ' |
8. Income taxes | |
The Company’s income tax expense for the three months ended June 30, 2014 and June 30, 2013 was $2.3 million and $1.7 million, respectively. The increase in income tax expense is due primarily to increased revenues in foreign jurisdictions where the Company is subject to foreign income taxes. The Company has net operating losses that may potentially be offset against future domestic earnings. The Company files federal income tax returns and income tax returns in various state and foreign jurisdictions. Due to the net operating loss carryforwards, the Company’s 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 June 30, 2014, the Company has 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, the Company will adjust all or a portion of the applicable valuation allowance in the period when such change occurs. | |
Equity
Equity | 3 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Equity | ' | |||||||||
Equity | ' | |||||||||
9. Equity | ||||||||||
A summary of the changes in total equity for the three months ended June 30, 2014 was as follows: | ||||||||||
RealD Inc. | ||||||||||
stockholders’ | Noncontrolling | Total | ||||||||
(in thousands) | deficit | interest | equity (deficit) | |||||||
Balance, March 31, 2014 | 151,412 | -578 | 150,834 | |||||||
Share-based compensation | 3,971 | - | 3,971 | |||||||
Exercise of stock options | 2,010 | - | 2,010 | |||||||
Other comprehensive loss, net of tax | -1 | - | -1 | |||||||
Comprehensive income: | ||||||||||
Net income | 5,501 | - | 5,501 | |||||||
Total comprehensive income | 5,501 | |||||||||
Balance, June 30, 2014 | $ | 162,893 | -578 | 162,315 | ||||||
Summary_of_significant_account1
Summary of significant accounting policies (Policies) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Summary of significant accounting policies | ' | |||||||
Accounting period | ' | |||||||
Accounting period | ||||||||
The Company’s fiscal year consists of four 3-month periods for a total of 12 calendar months and will end on March 31, 2015. | ||||||||
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. The most significant estimates made by management in the preparation of the financial statements relate to the following: | ||||||||
· | licensing revenue terms applied to the timing and number of motion picture exhibitor consumer admissions; | |||||||
· | domestic eyewear product revenue terms applied to when the usage occurs and the amount of usage; | |||||||
· | impairment testing of goodwill, intangible assets and tangible assets, including determination of relevant reporting units and long-lived asset groups; | |||||||
· | useful lives of intangible assets and tangible assets; | |||||||
· | timing and amount recognized for performance-based compensation, including bonus and certain restricted share units, based on projections of Company performance achievement; | |||||||
· | the impact of potential future tax consequences of events that have been recognized in the Company’s financial statements; and | |||||||
· | assumptions used in the determination of the fair value of equity-based awards for stock-based compensation. | |||||||
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 the Company’s 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 the Company’s 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 the Company’s employee stock purchase plan and unvested restricted stock units. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. | ||||||||
The calculation of the basic and diluted earnings (loss) per share of common stock for the three months ended June 30, 2014 and June 30, 2013 was as follows: | ||||||||
Three months ended | ||||||||
June 30, | June 30, | |||||||
(in thousands, except share and per share data) | 2014 | 2013 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | 5,501 | $ | -1,536 | ||||
Net loss attributable to noncontrolling interest | - | 2 | ||||||
Net income (loss) attributable to RealD Inc. common stockholders | $ | 5,501 | $ | -1,534 | ||||
Denominator: | ||||||||
Weighted-average common shares outstanding (basic) | 49,671 | 49,588 | ||||||
Effect of dilutive securities | 3,099 | – | ||||||
Weighted-average common shares outstanding (diluted) | 52,770 | 49,588 | ||||||
Earnings (loss) per common share: | ||||||||
Basic | $ | 0.11 | $ | -0.03 | ||||
Diluted | $ | 0.10 | $ | -0.03 | ||||
The weighted-average number of anti-dilutive shares excluded from the calculation of diluted earnings (loss) per common share for the three months ended June 30, 2014 and June 30, 2013 was as follows: | ||||||||
Three months ended | ||||||||
June 30, | June 30, | |||||||
(in thousands) | 2014 | 2013 | ||||||
Options, employee stock purchase plan, restricted stock units and warrants to purchase common stock | 9,394 | 9,871 | ||||||
Due to the loss attributable to the Company’s common stockholders in the three months ended June 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 | ||||||||
The Company’s 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 the Company’s condensed consolidated statements of operations. For all periods presented, none of the Company’s derivative instruments were designated as hedging instruments. The Company does not use foreign currency option or foreign exchange forward contracts for speculative or trading purposes. | ||||||||
The Company purchases foreign currency forward contracts, generally with maturities of nine months or less, to reduce the volatility of cash flows primarily related to forecasted payments and expenses denominated in certain foreign currencies. As of June 30, 2014, RealD had no outstanding forward contracts. As of March 31, 2014, the carrying amounts of the Company’s foreign currency forward contracts were not significant. For both the three months ended June 30, 2014 and June 30, 2013, the net loss related to the change in fair value of the Company’s foreign currency forward contracts was not significant. Foreign currency master agreements typically allow the netting of receivables and payables. The Company had no gross receivable balances or gross payable balances as of June 30, 2014 and any such amounts were not significant as of March 31, 2014. | ||||||||
Accounts receivable | ' | |||||||
Accounts receivable | ||||||||
Accounts receivable consists of trade receivables, value-added tax (“VAT”) receivables and other receivables. The Company provides credit to its customers, who are primarily in the movie production and exhibition businesses. The Company provides 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 the Company’s overall credit risk. The allowance for doubtful accounts and customer credits totaled $4.6 million and $3.2 million as of June 30, 2014 and March 31, 2014, 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, the Company evaluates ending inventories and deferred costs-eyewear for net realizable value. The Company also evaluates 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, RealD maintains reserves against such inventories. If the Company’s 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 June 30, 2014 and March 31, 2014, the inventory reserve as a result of the Company’s net realizable value analyses was $0.1 million and $0.6 million, respectively. | ||||||||
Domestically, the Company provides RealD eyewear free of charge to motion picture exhibitors and then receives a fee from the motion picture studios for the usage of RealD eyewear by the motion picture exhibitors’ consumers. Eyewear shipped from inventory is deferred on the shipment date and then amortized to cost of product revenue according to assumptions related to eyewear usage by consumers. | ||||||||
Impairment of long-lived assets | ' | |||||||
Impairment of long-lived assets | ||||||||
The Company reviews 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 June 30, 2014 and June 30, 2013, impairment charges for all impaired RealD Cinema Systems charged to cost of revenue totaled $1.0 million, respectively. | ||||||||
Revenue recognition | ' | |||||||
Revenue recognition | ||||||||
The Company derives substantially all of its revenue from the license of RealD Cinema Systems and the product sale of RealD eyewear. RealD evaluates revenue recognition for transactions using the criteria set forth by the Financial Accounting Standard Board Accounting Standards Codification Topic 840, Leases, and Accounting Standards Codification Topic 605, Revenue Recognition. 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. The Company records revenue net of estimated allowances. | ||||||||
License revenue | ||||||||
License revenue, net of allowances, 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 the Company’s control, including those related to admission and usage, are recognized as revenues when the contingency is resolved and the Company has no more obligations to our customers specific to the contingent payment received. Certain of the Company’s license revenue from leasing RealD Cinema Systems is earned upon admission by the motion picture exhibitor’s consumers. The Company’s licensees, however, do not report and pay for such license revenue until after the admission has occurred, which may be received subsequent to the Company’s fiscal period end. The Company estimates and records 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. The Company determines 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. The Company determines collectability based on an evaluation of the licensee’s recent payment history and evaluation of the respective customer’s credit-standing. | ||||||||
Product revenue | ||||||||
The Company recognizes 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 the Company’s product revenue from the sale of RealD eyewear is earned upon admission and usage by the motion picture exhibitor’s consumers. The Company’s 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 the Company’s fiscal period end. Accordingly, the Company estimates and records 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 months ended June 30, 2014 and June 30, 2013. | ||||||||
Shipping and handling costs | ' | |||||||
Shipping and handling costs | ||||||||
Amounts billed to customers for shipping and handling costs are included in revenue. RealD’s shipping and handling costs consists primarily of packaging and transportation charges and are recorded in cost of revenue. Shipping and handling costs recognized in cost of revenue were $2.3 million and $1.7 million for the three months ended June 30, 2014 and June 30, 2013, respectively. | ||||||||
Recent accounting pronouncements | ' | |||||||
Recent accounting pronouncements | ||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, effective for RealD as of April 1, 2017 (the first quarter of fiscal year 2018). The new standard will be implemented retrospectively with the Company choosing to either restate prior periods or recognize the cumulative effect. The new Topic 606 does not apply to lease contracts within the scope of Topic 840 leases. The objective of ASU 2014-09 is to provide guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. This ASU will supersede the revenue recognition requirements in Topic 605, “Revenue Recognition”, and most industry-specific guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. The Company is currently evaluating the impact of the adoption of this accounting standard update on its consolidated financial statements. | ||||||||
Summary_of_significant_account2
Summary of significant accounting policies (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Summary of significant accounting policies | ' | |||||||
Schedule of calculation of the basic and diluted loss per share of common stock | ' | |||||||
Three months ended | ||||||||
June 30, | June 30, | |||||||
(in thousands, except share and per share data) | 2014 | 2013 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | 5,501 | $ | -1,536 | ||||
Net loss attributable to noncontrolling interest | - | 2 | ||||||
Net income (loss) attributable to RealD Inc. common stockholders | $ | 5,501 | $ | -1,534 | ||||
Denominator: | ||||||||
Weighted-average common shares outstanding (basic) | 49,671 | 49,588 | ||||||
Effect of dilutive securities | 3,099 | – | ||||||
Weighted-average common shares outstanding (diluted) | 52,770 | 49,588 | ||||||
Earnings (loss) per common share: | ||||||||
Basic | $ | 0.11 | $ | -0.03 | ||||
Diluted | $ | 0.10 | $ | -0.03 | ||||
Schedule of weighted-average number of anti-dilutive shares excluded from the calculation of diluted loss per common share | ' | |||||||
Three months ended | ||||||||
June 30, | June 30, | |||||||
(in thousands) | 2014 | 2013 | ||||||
Options, employee stock purchase plan, restricted stock units and warrants to purchase common stock | 9,394 | 9,871 | ||||||
Property_and_equipment_RealD_C1
Property and equipment, RealD Cinema Systems and digital projectors (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Property and equipment, RealD Cinema Systems and digital projectors | ' | |||||||
Schedule of property and equipment of RealD Cinema Systems and digital projectors | ' | |||||||
June 30, | March 31, | |||||||
(in thousands) | 2014 | 2014 | ||||||
RealD Cinema Systems | $ | 206,012 | $ | 205,416 | ||||
Digital projectors - held for sale | - | 216 | ||||||
Leasehold improvements | 16,937 | 16,935 | ||||||
Machinery and equipment | 4,699 | 4,753 | ||||||
Furniture and fixtures | 1,272 | 1,272 | ||||||
Computer equipment and software | 9,253 | 9,197 | ||||||
Construction in process | 4,125 | 1,554 | ||||||
Total | $ | 242,298 | $ | 239,343 | ||||
Less accumulated depreciation | -118,185 | -110,060 | ||||||
Property and equipment, RealD Cinema Systems and digital projectors, net | $ | 124,113 | $ | 129,283 | ||||
Cost_reduction_plan_Tables
Cost reduction plan (Tables) | 3 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Cost reduction plan | ' | ||||||||||
Summary of charges resulting from implementation of the cost reduction plan | ' | ||||||||||
Three months ended June 30, 2014 | |||||||||||
(in thousands) | Personnel | Leasehold | Total | ||||||||
Cost of revenue | $ | - | $ | 71 | $ | 71 | |||||
Research and development | - | - | - | ||||||||
Selling and marketing | - | - | - | ||||||||
General and administrative | - | - | - | ||||||||
Total | $ | - | $ | 71 | $ | 71 | |||||
Summary of currently estimated charges resulting from the cost reduction plan implementation | ' | ||||||||||
Payments excluding non-cash impairment | |||||||||||
(in thousands) | Personnel | Leasehold | Total | ||||||||
Cost reduction plan liabilities as of March 31, 2014 | $ | 1,416 | $ | - | $ | 1,416 | |||||
Charges | - | 71 | 71 | ||||||||
(Payments) | -209 | -71 | -280 | ||||||||
Cost reduction plan liabilities as of June 30, 2014 | $ | 1,207 | $ | - | $ | 1,207 | |||||
Borrowings_and_Credit_Agreemen1
Borrowings and Credit Agreement (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Borrowings and Credit Agreement | ' | |||||||
Schedule of the current and non-current portions of the Credit Agreement | ' | |||||||
June 30, | March 31, | |||||||
2014 | 2014 | |||||||
(in thousands) | ||||||||
Current portion of Credit Agreement | $ | 7,460 | $ | 12,500 | ||||
Credit Agreement, net of current portion | 27,975 | 23,750 | ||||||
Total Credit Agreement | 35,435 | 36,250 | ||||||
Schedule of future minimum Credit Agreement obligations | ' | |||||||
At June 30, 2014, the Company’s future minimum 2014 Credit Agreement obligations were as follows: | ||||||||
Fiscal year 2015 | $ | 5,595 | ||||||
Fiscal year 2016 | 7,460 | |||||||
Fiscal year 2017 | 7,460 | |||||||
Fiscal year 2018 | 7,460 | |||||||
Fiscal year 2019 | 7,460 | |||||||
Total | $ | 35,435 | ||||||
Sharebased_compensation_Tables
Share-based compensation (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Share-based compensation | ' | |||||||
Schedule of share-based compensation expense for all share-based arrangements | ' | |||||||
Three months ended | ||||||||
June 30, | June 30, | |||||||
(in thousands) | 2014 | 2013 | ||||||
Share-based compensation | ||||||||
Cost of revenue | $ | 191 | $ | 299 | ||||
Research and development | 626 | 707 | ||||||
Selling and marketing | 927 | 1,322 | ||||||
General and administrative | 2,227 | 2,317 | ||||||
Total | $ | 3,971 | $ | 4,645 | ||||
Equity_Tables
Equity (Tables) | 3 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Equity | ' | |||||||||
Summary of the changes in total equity | ' | |||||||||
RealD Inc. | ||||||||||
stockholders’ | Noncontrolling | Total | ||||||||
(in thousands) | deficit | interest | equity (deficit) | |||||||
Balance, March 31, 2014 | 151,412 | -578 | 150,834 | |||||||
Share-based compensation | 3,971 | - | 3,971 | |||||||
Exercise of stock options | 2,010 | - | 2,010 | |||||||
Other comprehensive loss, net of tax | -1 | - | -1 | |||||||
Comprehensive income: | ||||||||||
Net income | 5,501 | - | 5,501 | |||||||
Total comprehensive income | 5,501 | |||||||||
Balance, June 30, 2014 | $ | 162,893 | -578 | 162,315 | ||||||
Summary_of_significant_account3
Summary of significant accounting policies (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
item | ||
Accounting period | ' | ' |
Number of period in an accounting period | ' | 4 |
Length of quarter | ' | '3 months |
Length of fiscal year | ' | '12 months |
Numerator: | ' | ' |
Net income (loss) | $5,501 | ($1,536) |
Net (income) loss attributable to noncontrolling interest | ' | 2 |
Net income (loss) attributable to RealD Inc. common stockholders | $5,501 | ($1,534) |
Denominator: | ' | ' |
Weighted-average common shares outstanding (basic) | 49,671 | 49,588 |
Effect of dilutive securities (in shares) | 3,099 | ' |
Weighted-average common shares outstanding (diluted) | 52,770 | 49,588 |
Earnings (loss) per common share: | ' | ' |
Basic (in dollars per share) | $0.11 | ($0.03) |
Diluted (in dollars per share) | $0.10 | ($0.03) |
Stock Options, Employee Stock Purchase Plan, Restricted Stock Units and Warrants [Member] | ' | ' |
Loss per share of common stock | ' | ' |
Weighted-average number of anti-dilutive shares excluded from the calculation of diluted loss per common share | 9,394 | 9,871 |
Summary_of_significant_account4
Summary of significant accounting policies (Details 2) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | ||
item | item | Not Designated as Hedging Instrument [Member] | |||
Fair Value, Inputs, Level 2 [Member] | |||||
Derivative instruments | ' | ' | ' | ' | ' |
Number of derivative instruments | ' | ' | 0 | 0 | ' |
Foreign currency forward contracts, maturity period | ' | ' | ' | ' | '9 months |
Accounts receivable: value added tax (VAT) receivables | ' | ' | ' | ' | ' |
Allowance for doubtful accounts and customer credits | $4.60 | $3.20 | ' | ' | ' |
Inventories and deferred costs-eyewear | ' | ' | ' | ' | ' |
Inventory reserve | $0.10 | $0.60 | ' | ' | ' |
Summary_of_significant_account5
Summary of significant accounting policies (Details 3) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Comprehensive income (loss) | ' | ' |
Reclassifications out of accumulated other comprehensive income (loss) | $0 | $0 |
Shipping and handling costs | ' | ' |
Shipping and handling costs | 2.3 | 1.7 |
Cinema Systems [Member] | ' | ' |
Impairment of long-lived assets | ' | ' |
Impairment charges | $1 | ' |
Property_and_equipment_RealD_C2
Property and equipment, RealD Cinema Systems and digital projectors (Details) (USD $) | 3 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | $242,298,000 | ' | $239,343,000 |
Less accumulated depreciation | -118,185,000 | ' | -110,060,000 |
Property and equipment, RealD Cinema Systems and digital projectors, net | 124,113,000 | ' | 129,283,000 |
Depreciation expense | 9,500,000 | 9,200,000 | ' |
Cash received from motion picture exhibitor customers for the sale of digital projectors | ' | 70,000 | ' |
Cinema Systems [Member] | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 206,012,000 | ' | 205,416,000 |
Digital Projectors Held For Sale [Member] | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | ' | ' | 216,000 |
Leaseholds and Leasehold Improvements [Member] | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 16,937,000 | ' | 16,935,000 |
Machinery and Equipment [Member] | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 4,699,000 | ' | 4,753,000 |
Furniture and Fixtures [Member] | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 1,272,000 | ' | 1,272,000 |
Computer Equipment and Software [Member] | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | 9,253,000 | ' | 9,197,000 |
Construction in Progress [Member] | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors | ' | ' | ' |
Property and equipment, RealD Cinema Systems and digital projectors, gross | $4,125,000 | ' | $1,554,000 |
Cost_reduction_plan_Details
Cost reduction plan (Details) (USD $) | 3 Months Ended |
Jun. 30, 2014 | |
Cost reduction plan | ' |
Percentage of staff reduced under the cost reduction plan | 20.00% |
Cost reduction plan total chargese incurred to date | $4,800,000 |
Total charges associated with the cost reduction plan | 71,000 |
Cost of Sales [Member] | ' |
Cost reduction plan | ' |
Total charges associated with the cost reduction plan | 71,000 |
Employee Severance [Member] | ' |
Cost reduction plan | ' |
Charges related to staff reduced | 4,700,000 |
Facility Closing [Member] | ' |
Cost reduction plan | ' |
Expected cost to be incurred related to exiting a lease | 600,000 |
Total charges associated with the cost reduction plan | 71,000 |
Facility Closing [Member] | Cost of Sales [Member] | ' |
Cost reduction plan | ' |
Total charges associated with the cost reduction plan | 71,000 |
Scenario, Forecast [Member] | Minimum [Member] | ' |
Cost reduction plan | ' |
Cost reduction plan estimated total charges | 5,300,000 |
Scenario, Forecast [Member] | Maximum [Member] | ' |
Cost reduction plan | ' |
Cost reduction plan estimated total charges | $5,900,000 |
Cost_reduction_plan_Details_2
Cost reduction plan (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Summary of currently incurred charges resulting from implementation of the cost reduction plan within accrued expenses and other liabilities | ' | ' |
Cost reduction plan liabilities, period start | $1,416 | ' |
Expensed | 71 | ' |
(Payments) | 280 | ' |
Cost reduction plan liabilities, period end | 1,207 | ' |
Impairment | 1,016 | 953 |
Employee Severance [Member] | ' | ' |
Summary of currently incurred charges resulting from implementation of the cost reduction plan within accrued expenses and other liabilities | ' | ' |
Cost reduction plan liabilities, period start | 1,416 | ' |
(Payments) | 209 | ' |
Cost reduction plan liabilities, period end | 1,207 | ' |
Facility Closing [Member] | ' | ' |
Summary of currently incurred charges resulting from implementation of the cost reduction plan within accrued expenses and other liabilities | ' | ' |
Expensed | 71 | ' |
(Payments) | 71 | ' |
Scenario, Forecast [Member] | Leaseholds and Leasehold Improvements [Member] | ' | ' |
Summary of currently incurred charges resulting from implementation of the cost reduction plan within accrued expenses and other liabilities | ' | ' |
Impairment | $7,000 | ' |
Borrowings_and_Credit_Agreemen2
Borrowings and Credit Agreement (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | ||||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Jun. 26, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 26, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 26, 2014 | Jun. 30, 2014 | Jun. 26, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 30, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Apr. 19, 2012 | Jun. 26, 2014 | Jun. 30, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | |
2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | 2014 Credit Agreement [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | ||||
Debt Instrument Variable Base Rate [Member] | Eurocurrency Rate [Member] | FederalFundsRate [Member] | FederalFundsRate [Member] | Eurocurrency Rate For A One Month Interest Period [Member] | Eurocurrency Rate For A One Month Interest Period [Member] | City National Bank Prime Rate [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | item | Maximum [Member] | |||||||||||||
Eurocurrency Rate [Member] | Eurocurrency Rate For A One Month Interest Period [Member] | Eurocurrency Rate [Member] | Eurocurrency Rate For A One Month Interest Period [Member] | |||||||||||||||||||||||||||
Borrowings and Credit Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000,000 | ' | ' | ' | $50,000,000 |
Borrowing capacity that maybe requested | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000,000 | ' | ' | ' | ' | ' | ' | ' |
Interest rate added to base rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | 1.00% | ' | ' | ' | 2.25% | ' | ' | 2.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate added to variable rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.25% | ' | ' | 1.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fee of unused balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | 0.38% | ' | 0.38% | ' | ' | ' |
Letter of credit fee (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.25% | ' | ' | 2.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis | ' | ' | ' | ' | ' | ' | ' | ' | 'base rate | 'Eurocurrency rate | ' | 'Federal Funds | ' | 'Eurocurrency rate | 'City National's prime rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowings drawn | 37,300,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 37,300,000 | ' | ' |
Available borrowing capacity | ' | ' | ' | ' | 62,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | 12,700,000 | 12,700,000 | ' |
Borrowings repaid | 38,115,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount outstanding | 0 | ' | 0 | ' | ' | ' | ' | 36,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | 35,400,000 | ' | ' |
Number of installments for periodic payment of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15 | ' | ' |
Amount of periodic payment of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,900,000 | ' | ' |
Debt issuance costs | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred charge remaining | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Calculation of the current and non-current portion of the Credit Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current portion of Credit Agreement | 7,460,000 | ' | 12,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit Agreement, net of current portion | 27,975,000 | ' | 23,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total Credit Agreement | 35,435,000 | ' | 36,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future minimum Credit Agreement obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2015 | 5,595,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2016 | 7,460,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2017 | 7,460,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2018 | 7,460,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fiscal year 2019 | 7,460,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | 2.69% | ' | ' | 2.88% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | $200,000 | $400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_contingencies_
Commitments and contingencies (Details) (Purchase Commitment [Member], USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Indemnities and commitments | ' |
Future obligations | $6.30 |
Revolving supply commitments | '90 days |
Maximum [Member] | ' |
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 | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Share-based compensation | ' | ' |
Share-based compensation expense | $3,971 | $4,645 |
Cost of Sales [Member] | ' | ' |
Share-based compensation | ' | ' |
Share-based compensation expense | 191 | 299 |
Research and Development Expense [Member] | ' | ' |
Share-based compensation | ' | ' |
Share-based compensation expense | 626 | 707 |
Selling and Marketing Expense [Member] | ' | ' |
Share-based compensation | ' | ' |
Share-based compensation expense | 927 | 1,322 |
General and Administrative Expense [Member] | ' | ' |
Share-based compensation | ' | ' |
Share-based compensation expense | $2,227 | $2,317 |
Sharebased_compensation_Detail1
Share-based compensation (Details 2) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||||||||||||||
In Thousands, except Share data in Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 |
Employee Stock Option [Member] | Stock Options and Employee Stock [Member] | Stock Options and Employee Stock [Member] | Performance Stock Options [Member] | Performance Stock Options [Member] | Performance Stock Options [Member] | Performance Stock Options [Member] | Performance Stock Units PSUs [Member] | Performance Stock Units PSUs [Member] | Performance Stock Units PSUs [Member] | Performance Stock Units PSUs [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | |||
Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | ||||||||||||
Chief Executive Officer [Member] | Chief Executive Officer [Member] | ||||||||||||||||
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) | ' | ' | 0.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' |
Weighted average grant date fair value (in dollars per share) | ' | ' | $6.21 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $11.42 | ' | ' | ' |
Share-based compensation expense (in dollars) | $3,971 | $4,645 | ' | $2,800 | $3,500 | $0 | $500 | ' | ' | $100 | $100 | ' | ' | $1,200 | $500 | ' | ' |
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 | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Income taxes | ' | ' |
Income tax expense (benefit) | $2,287 | $1,715 |
Equity_Details
Equity (Details) (USD $) | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 |
Parent [Member] | Noncontrolling Interest [Member] | Noncontrolling Interest [Member] | |||
Balance | $150,834 | ' | $151,412 | ($578) | ($578) |
Share-based compensation | 3,971 | ' | 3,971 | ' | ' |
Exercise of stock options | 2,010 | ' | 2,010 | ' | ' |
Other comprehensive loss, net of tax | -1 | 137 | -1 | ' | ' |
Net income (loss) | 5,501 | -1,536 | 5,501 | ' | ' |
Total comprehensive income | 5,501 | ' | ' | ' | ' |
Balance | $162,315 | ' | $162,893 | ($578) | ($578) |