Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Dec. 31, 2014 | Feb. 02, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | RealD Inc. | |
Entity Central Index Key | 1327471 | |
Current Fiscal Year End Date | -28 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Dec-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q3 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 50,361,632 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $51,750 | $28,800 |
Accounts receivable, net | 33,385 | 48,422 |
Inventories | 6,525 | 9,109 |
Deferred costs – eyewear | 191 | 149 |
Prepaid expenses and other current assets | 5,099 | 5,197 |
Total current assets | 96,950 | 91,677 |
Property and equipment, net | 21,980 | 22,491 |
Cinema systems, net | 91,566 | 106,792 |
Goodwill | 10,657 | 10,657 |
Other intangibles, net | 5,198 | 6,154 |
Deferred income taxes | 4,571 | 4,571 |
Other assets | 8,792 | 4,840 |
Total assets | 239,714 | 247,182 |
Current liabilities: | ||
Accounts payable | 5,245 | 12,470 |
Accrued expenses and other liabilities | 24,010 | 21,896 |
Deferred revenue | 5,295 | 8,143 |
Income taxes payable | 681 | 1,790 |
Deferred income taxes | 4,297 | 4,288 |
Current portion of Credit Agreement | 7,460 | 12,500 |
Total current liabilities | 46,988 | 61,087 |
Credit Agreement, net of current portion | 24,245 | 23,750 |
Deferred revenue, net of current portion | 4,088 | 6,465 |
Other long-term liabilities | 4,263 | 5,046 |
Total liabilities | 79,584 | 96,348 |
Commitments and contingencies | ||
Equity (deficit) | ||
Common stock, $0.0001 par value, 200,000 shares authorized; 50,319 and 49,438 shares issued and outstanding at December 31, 2014 and March 31, 2014, respectively | 367,501 | 352,913 |
Accumulated deficit | -208,865 | -201,763 |
Accumulated other comprehensive income | 2,072 | 262 |
Total RealD Inc. stockholders’ equity | 160,708 | 151,412 |
Noncontrolling interest | -578 | -578 |
Total equity | 160,130 | 150,834 |
Total liabilities and equity | $239,714 | $247,182 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Mar. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, share issued | 50,319,000 | 49,438,000 |
Common stock, shares outstanding | 50,319,000 | 49,438,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Revenue: | |||||||
License | $20,958 | $32,190 | $35,813 | $35,619 | $68,003 | $88,961 | $103,901 |
Product and other | 11,613 | 15,578 | 19,406 | 19,819 | 34,984 | 46,597 | 54,685 |
Total revenue | 32,571 | 47,768 | 55,219 | 55,438 | 102,987 | 135,558 | 158,586 |
Cost of revenue: | |||||||
License | 11,487 | 11,277 | 10,848 | 11,472 | 22,125 | 33,612 | 33,981 |
Product and other | 6,121 | 10,939 | 14,350 | 16,696 | 25,289 | 31,410 | 49,248 |
Total cost of revenue | 17,608 | 22,216 | 25,198 | 28,168 | 47,414 | 65,022 | 83,229 |
Gross profit | 14,963 | 25,552 | 30,021 | 27,270 | 55,573 | 70,536 | 75,357 |
Operating expenses: | |||||||
Research and development | 4,582 | 6,392 | 3,718 | 5,236 | 10,110 | 14,692 | 15,465 |
Selling and marketing | 4,382 | 5,330 | 5,781 | 6,842 | 11,111 | 15,493 | 20,295 |
General and administrative | 12,654 | 11,156 | 11,994 | 13,161 | 23,150 | 35,804 | 39,533 |
Total operating expenses | 21,618 | 22,878 | 21,493 | 25,239 | 44,371 | 65,989 | 75,293 |
Operating income (loss) | -6,655 | 2,674 | 8,528 | 2,031 | 11,202 | 4,547 | 64 |
Interest expense, net | -393 | -413 | -472 | -525 | -885 | -1,278 | -1,765 |
Other income (loss) | -3,088 | -1,336 | 160 | -47 | -1,176 | -4,264 | 227 |
Income (loss) before income taxes | -10,136 | 925 | 8,216 | 1,459 | 9,141 | -995 | -1,474 |
Income tax expense | 1,154 | 1,676 | 2,287 | 1,614 | 3,963 | 5,117 | 4,881 |
Net loss | -11,290 | -751 | 5,929 | -155 | 5,178 | -6,112 | -6,355 |
Net income attributable to noncontrolling interest | 0 | 0 | 0 | -116 | 0 | 0 | -101 |
Net loss attributable to RealD Inc. common stockholders | ($11,290) | ($751) | $5,929 | ($271) | $5,178 | ($6,112) | ($6,456) |
Loss per common share: | |||||||
Basic (in dollars per share) | ($0.23) | ($0.02) | $0.12 | ($0.01) | $0.10 | ($0.12) | ($0.13) |
Diluted (in dollars per share) | ($0.23) | ($0.02) | $0.11 | ($0.01) | $0.10 | ($0.12) | ($0.13) |
Shares used in computing loss per common share: | |||||||
Basic (in shares) | 49,771 | 49,325 | 49,935 | 49,459 | |||
Diluted (in shares) | 49,771 | 49,325 | 49,935 | 49,459 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | ($11,290) | ($155) | ($6,112) | ($6,355) |
Other comprehensive income, net of tax: | ||||
Foreign currency translation gains | 1,339 | 71 | 1,810 | 276 |
Other comprehensive income, net of tax | 1,339 | 71 | 1,810 | 276 |
Comprehensive loss | ($9,951) | ($84) | ($4,302) | ($6,079) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Cash flows from operating activities | ||
Net loss | ($6,112) | ($6,355) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 29,925 | 30,082 |
Deferred income tax | 1 | 35 |
Non-cash interest expense | 203 | 281 |
Non-cash stock compensation | 11,515 | 13,605 |
Loss on disposal of property and equipment | 154 | 103 |
Impairment of long-lived assets and related purchase commitments | 2,736 | 3,547 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 13,916 | -5,872 |
Inventories | 2,269 | 6,079 |
Prepaid expenses and other current assets | 117 | -1,809 |
Deferred costs - eyewear | -42 | 66 |
Other assets | -3,286 | 114 |
Accounts payable | -7,137 | -15,848 |
Accrued expenses and other liabilities | 2,347 | 1,314 |
Other long-term liabilities | -783 | -572 |
Income taxes receivable/payable | -1,152 | 1,065 |
Deferred revenue | -5,224 | -4,828 |
Net cash provided by operating activities | 40,093 | 21,520 |
Cash flows from investing activities | ||
Purchases of property and equipment | -4,032 | -3,805 |
Purchases of cinema systems and related components | -12,626 | -15,646 |
Proceeds from sale of property and equipment | 79 | 215 |
Net cash used in investing activities | -16,579 | -19,236 |
Cash flows from financing activities | ||
Proceeds from Credit Agreement | 37,300 | 37,500 |
Repayments on Credit Agreement | -41,845 | -35,625 |
Payments of debt issuance costs | -895 | 0 |
Proceeds from exercise of stock options | 2,782 | 1,374 |
Proceeds from employee stock purchase plan | 291 | 303 |
Repurchase of statutory withholdings of stock issued for restricted stock units | -990 | 0 |
Purchases of treasury stock | 0 | -7,511 |
Net cash used in financing activities | -3,357 | -3,959 |
Effect of currency exchange rate changes on cash and cash equivalent | 2,793 | 276 |
Net increase (decrease) in cash and cash equivalents | 22,950 | -1,399 |
Cash and cash equivalents, beginning of period | 28,800 | 31,020 |
Cash and cash equivalents, end of period | 51,750 | 29,621 |
Non-Cash Bad Debt Expense | $646 | $513 |
Business_and_basis_of_presenta
Business and basis of presentation | 9 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and basis of presentation | 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 quarter ended December 31, 2014 refers to RealD Inc. and its subsidiaries. | |
The accompanying unaudited condensed consolidated financial statements as of December 31, 2014 and for the three months and nine months ended December 31, 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. |
Effect_of_certain_correction_o
Effect of certain correction on certain financial statements | 9 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||
Effect of certain correction on certain financial statements | Effect of certain correction on certain financial statements | ||||||||||||||||||||||||
During the third quarter of fiscal year 2015, the Company identified certain errors and, accordingly, performed additional analyses and supplementary review procedures, following the guidance of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 250 Accounting Changes and Error Corrections and the Securities and Exchange Commission (SEC) Staff Accounting Bulletin Topic 1 Financial Statements. Upon completion of these procedures, the Company concluded that the effects of the errors were not material to any prior year previously reported amounts but are material to previously reported interim amounts for the first and second quarters of the current fiscal year. Accordingly, the Company has restated certain previously reported interim condensed consolidated balance sheet, condensed consolidated statements of operations and condensed consolidated statements of cash flows amounts to correct these errors. | |||||||||||||||||||||||||
Description of Adjustments | |||||||||||||||||||||||||
In the course of the Company's financial statement closing process for the quarter ended December 31, 2014, the following individually immaterial errors related to previously reported financial information were discovered: | |||||||||||||||||||||||||
•recognizing accruals for completed installments of cinema systems and related components; | |||||||||||||||||||||||||
•reclassification of loan payment due to a bank automatic withdrawal occurring one day late; | |||||||||||||||||||||||||
•accounting for shares withheld to satisfy minimum withholding requirements for vested share based grants; | |||||||||||||||||||||||||
•elimination of inter-entity sales transactions and corresponding foreign currency impacts; and | |||||||||||||||||||||||||
•adjustments to various accruals and allowances. | |||||||||||||||||||||||||
The effect of the correction on certain financial statement captions within the Company's Condensed Consolidated Statements of Operations was as follows: | |||||||||||||||||||||||||
Three months ended June 30, 2014 | |||||||||||||||||||||||||
As Reported | Adjustments | Restated Amounts | |||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
License | $ | 35,973 | $ | (160 | ) | $ | 35,813 | ||||||||||||||||||
Product and other | 19,406 | — | 19,406 | ||||||||||||||||||||||
Total revenue | 55,379 | (160 | ) | 55,219 | |||||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||||
License | 10,897 | (49 | ) | 10,848 | |||||||||||||||||||||
Product and other | 14,499 | (149 | ) | 14,350 | |||||||||||||||||||||
Total cost of revenue | 25,396 | (198 | ) | 25,198 | |||||||||||||||||||||
Gross profit | 29,983 | 38 | 30,021 | ||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||
Research and development | 3,790 | (72 | ) | 3,718 | |||||||||||||||||||||
Selling and marketing | 5,791 | (10 | ) | 5,781 | |||||||||||||||||||||
General and administrative | 12,344 | (350 | ) | 11,994 | |||||||||||||||||||||
Total operating expenses | 21,925 | (432 | ) | 21,493 | |||||||||||||||||||||
Operating income | 8,058 | 470 | 8,528 | ||||||||||||||||||||||
Interest expense, net | (430 | ) | (42 | ) | (472 | ) | |||||||||||||||||||
Other income | 160 | — | 160 | ||||||||||||||||||||||
Income before income taxes | 7,788 | 428 | 8,216 | ||||||||||||||||||||||
Income tax expense | 2,287 | — | 2,287 | ||||||||||||||||||||||
Net income | 5,501 | 428 | 5,929 | ||||||||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | ||||||||||||||||||||||
Net income attributable to RealD Inc. common stockholders | $ | 5,501 | $ | 428 | $ | 5,929 | |||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||||
Basic | $ | 0.11 | $ | 0.01 | $ | 0.12 | |||||||||||||||||||
Diluted | $ | 0.1 | $ | 0.01 | $ | 0.11 | |||||||||||||||||||
Three months ended September 30, 2014 | Six months ended September 30, 2014 | ||||||||||||||||||||||||
As Reported | Adjustments | Restated Amounts | As Reported | Adjustments | Restated Amounts | ||||||||||||||||||||
(In thousands, except per share data) | (In thousands, except per share data) | ||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
License | $ | 31,834 | $ | 356 | $ | 32,190 | $ | 67,807 | $ | 196 | $ | 68,003 | |||||||||||||
Product and other | 15,578 | — | 15,578 | 34,984 | — | 34,984 | |||||||||||||||||||
Total revenue | 47,412 | 356 | 47,768 | 102,791 | 196 | 102,987 | |||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||||
License | 11,613 | (336 | ) | 11,277 | 22,510 | (385 | ) | 22,125 | |||||||||||||||||
Product and other | 10,892 | 47 | 10,939 | 25,391 | (102 | ) | 25,289 | ||||||||||||||||||
Total cost of revenue | 22,505 | (289 | ) | 22,216 | 47,901 | (487 | ) | 47,414 | |||||||||||||||||
Gross profit | 24,907 | 645 | 25,552 | 54,890 | 683 | 55,573 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||
Research and development | 6,425 | (33 | ) | 6,392 | 10,215 | (105 | ) | 10,110 | |||||||||||||||||
Selling and marketing | 5,414 | (84 | ) | 5,330 | 11,205 | (94 | ) | 11,111 | |||||||||||||||||
General and administrative | 11,168 | (12 | ) | 11,156 | 23,512 | (362 | ) | 23,150 | |||||||||||||||||
Total operating expenses | 23,007 | (129 | ) | 22,878 | 44,932 | (561 | ) | 44,371 | |||||||||||||||||
Operating income | 1,900 | 774 | 2,674 | 9,958 | 1,244 | 11,202 | |||||||||||||||||||
Interest expense, net | (455 | ) | 42 | (413 | ) | (885 | ) | — | (885 | ) | |||||||||||||||
Other loss | (1,336 | ) | — | (1,336 | ) | (1,176 | ) | — | (1,176 | ) | |||||||||||||||
Income before income taxes | 109 | 816 | 925 | 7,897 | 1,244 | 9,141 | |||||||||||||||||||
Income tax expense | 1,676 | — | 1,676 | 3,963 | — | 3,963 | |||||||||||||||||||
Net income (loss) | (1,567 | ) | 816 | (751 | ) | 3,934 | 1,244 | 5,178 | |||||||||||||||||
Net income (loss) attributable to noncontrolling interest | — | — | — | — | — | — | |||||||||||||||||||
Net income (loss) attributable to RealD Inc. common stockholders | $ | (1,567 | ) | $ | 816 | $ | (751 | ) | $ | 3,934 | $ | 1,244 | $ | 5,178 | |||||||||||
Earnings (loss) per common share: | |||||||||||||||||||||||||
Basic | $ | (0.03 | ) | $ | 0.01 | $ | (0.02 | ) | $ | 0.08 | $ | 0.02 | $ | 0.1 | |||||||||||
Diluted | $ | (0.03 | ) | $ | 0.01 | $ | (0.02 | ) | $ | 0.08 | $ | 0.02 | $ | 0.1 | |||||||||||
The effect of the correction on certain financial statement captions within the Company's Condensed Consolidated Balance Sheet was as follows: | |||||||||||||||||||||||||
As of June 30, 2014 | |||||||||||||||||||||||||
As Reported | Adjustments | Restated Amounts | |||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 27,841 | $ | 1,865 | $ | 29,706 | |||||||||||||||||||
Accounts receivable, net | 59,818 | (342 | ) | 59,476 | |||||||||||||||||||||
Inventories | 7,807 | 90 | 7,897 | ||||||||||||||||||||||
Prepaid expenses and other current assets | 4,834 | (47 | ) | 4,787 | |||||||||||||||||||||
Total current assets | 101,013 | 1,566 | 102,579 | ||||||||||||||||||||||
Cinema systems, net | 100,355 | 2,651 | 103,006 | ||||||||||||||||||||||
Other assets | 7,230 | (107 | ) | 7,123 | |||||||||||||||||||||
Total assets | $ | 253,421 | $ | 4,110 | $ | 257,531 | |||||||||||||||||||
Accrued expenses and other liabilities | $ | 20,505 | $ | 2,123 | $ | 22,628 | |||||||||||||||||||
Deferred revenue | 7,046 | (300 | ) | 6,746 | |||||||||||||||||||||
Current portion of Credit Agreement | 7,460 | 1,865 | 9,325 | ||||||||||||||||||||||
Total current liabilities | 52,638 | 3,688 | 56,326 | ||||||||||||||||||||||
Total liabilities | 91,106 | 3,688 | 94,794 | ||||||||||||||||||||||
Accumulated deficit | (196,262 | ) | 159 | (196,103 | ) | ||||||||||||||||||||
Accumulated other comprehensive income | 261 | 263 | 524 | ||||||||||||||||||||||
Total RealD Inc. stockholders’ equity | 162,893 | 422 | 163,315 | ||||||||||||||||||||||
Total equity | 162,315 | 422 | 162,737 | ||||||||||||||||||||||
Total liabilities and equity | $ | 253,421 | $ | 4,110 | $ | 257,531 | |||||||||||||||||||
As of September 30, 2014 | |||||||||||||||||||||||||
As Reported | Adjustments | Restated Amounts | |||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 49,903 | $ | — | $ | 49,903 | |||||||||||||||||||
Accounts receivable, net | 40,600 | (178 | ) | 40,422 | |||||||||||||||||||||
Inventories | 7,704 | 90 | 7,794 | ||||||||||||||||||||||
Total current assets | 103,238 | (88 | ) | 103,150 | |||||||||||||||||||||
Cinema systems, net | 96,106 | 1,725 | 97,831 | ||||||||||||||||||||||
Total assets | $ | 250,989 | $ | 1,637 | $ | 252,626 | |||||||||||||||||||
Accrued expenses and other liabilities | $ | 22,332 | $ | 899 | $ | 23,231 | |||||||||||||||||||
Deferred revenue | 6,673 | (117 | ) | 6,556 | |||||||||||||||||||||
Total current liabilities | 50,074 | 782 | 50,856 | ||||||||||||||||||||||
Total liabilities | 85,418 | 782 | 86,200 | ||||||||||||||||||||||
Accumulated deficit | (197,829 | ) | 547 | (197,282 | ) | ||||||||||||||||||||
Accumulated other comprehensive income | 425 | 308 | 733 | ||||||||||||||||||||||
Total RealD Inc. stockholders’ equity | 166,149 | 855 | 167,004 | ||||||||||||||||||||||
Total equity | 165,571 | 855 | 166,426 | ||||||||||||||||||||||
Total liabilities and equity | $ | 250,989 | $ | 1,637 | $ | 252,626 | |||||||||||||||||||
The effect of the correction on certain financial statement captions within the Company's Condensed Consolidated Statement of Cash Flow was as follows: | |||||||||||||||||||||||||
Three months ended June 30, 2014 | Six months ended September 30, 2014 | ||||||||||||||||||||||||
As Reported | Adjustments | Restated Amounts | As Reported | Adjustments | Restated Amounts | ||||||||||||||||||||
Cash flows from operating activities | |||||||||||||||||||||||||
Net income | $ | 5,501 | $ | 428 | $ | 5,929 | $ | 3,934 | $ | 1,244 | $ | 5,178 | |||||||||||||
Adjustments to reconcile net income to net cash provided (used) by operating activities: | |||||||||||||||||||||||||
Depreciation and amortization | 9,813 | — | 9,813 | 20,223 | (218 | ) | 20,005 | ||||||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||||||
Accounts receivable | (11,396 | ) | 342 | (11,054 | ) | 7,822 | 178 | 8,000 | |||||||||||||||||
Inventories | 1,302 | (90 | ) | 1,212 | 1,405 | (90 | ) | 1,315 | |||||||||||||||||
Prepaid expenses and other current assets | 1,273 | 47 | 1,320 | 237 | — | 237 | |||||||||||||||||||
Other assets | (2,390 | ) | 107 | (2,283 | ) | (2,316 | ) | — | (2,316 | ) | |||||||||||||||
Accrued expenses and other liabilities | (1,429 | ) | 2,123 | 694 | 436 | 899 | 1,335 | ||||||||||||||||||
Deferred revenue | (1,913 | ) | (300 | ) | (2,213 | ) | (2,998 | ) | (117 | ) | (3,115 | ) | |||||||||||||
Net cash provided by operating activities | 4,106 | 2,657 | 6,763 | 32,933 | 1,896 | 34,829 | |||||||||||||||||||
Cash flows from investing activities | |||||||||||||||||||||||||
Purchases of property and equipment | (2,632 | ) | (263 | ) | (2,895 | ) | (3,448 | ) | — | (3,448 | ) | ||||||||||||||
Purchases of cinema systems and related components | (2,799 | ) | (2,388 | ) | (5,187 | ) | (7,456 | ) | (1,507 | ) | (8,963 | ) | |||||||||||||
Net cash used in investing activities | (5,364 | ) | (2,651 | ) | (8,015 | ) | (10,825 | ) | (1,507 | ) | (12,332 | ) | |||||||||||||
Cash flows from financing activities | |||||||||||||||||||||||||
Repayments on Credit Agreement | (38,115 | ) | 1,865 | (36,250 | ) | (39,980 | ) | — | (39,980 | ) | |||||||||||||||
Repayments on tax withholding of restricted stock units | — | (269 | ) | (269 | ) | — | (697 | ) | (697 | ) | |||||||||||||||
Net cash provided (used) by financing activities | 300 | 1,596 | 1,896 | (1,168 | ) | (697 | ) | (1,865 | ) | ||||||||||||||||
Effect of currency exchange rate changes on cash and cash equivalent | (1 | ) | 263 | 262 | 163 | 308 | 471 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (959 | ) | 1,865 | 906 | 21,103 | — | 21,103 | ||||||||||||||||||
Cash and cash equivalents, beginning of period | 28,800 | — | 28,800 | 28,800 | — | 28,800 | |||||||||||||||||||
Cash and cash equivalents, end of period | $ | 27,841 | $ | 1,865 | $ | 29,706 | $ | 49,903 | $ | — | $ | 49,903 | |||||||||||||
The effect of the correction on certain financial statement captions within the Company's Condensed Consolidated Statements of Comprehensive Income (Loss) were not material for any previously reported periods. |
Summary_of_significant_account
Summary of significant accounting policies | 9 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Summary of significant accounting policies | 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; | |||||||||||||||
• | effect of customer contract terms on revenue and balance sheet items; | |||||||||||||||
• | 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; | |||||||||||||||
• | valuation of accruals and allowances; | |||||||||||||||
• | contingency assessments; 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 loss per share of common stock for the three and nine months ended December 31, 2014 and December 31, 2013 was as follows: | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(in thousands, except share and per share data) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Numerator: | ||||||||||||||||
Net loss | $ | (11,290 | ) | $ | (155 | ) | (6,112 | ) | (6,355 | ) | ||||||
Net income attributable to noncontrolling interest | — | (116 | ) | — | (101 | ) | ||||||||||
Net loss attributable to RealD Inc. common stockholders | $ | (11,290 | ) | $ | (271 | ) | $ | (6,112 | ) | $ | (6,456 | ) | ||||
Denominator: | ||||||||||||||||
Weighted-average common shares outstanding (basic) | 49,771 | 49,325 | 49,935 | 49,459 | ||||||||||||
Effect of dilutive securities | — | — | — | — | ||||||||||||
Weighted-average common shares outstanding (diluted) | 49,771 | 49,325 | 49,935 | 49,459 | ||||||||||||
Loss per common share: | ||||||||||||||||
Basic | $ | (0.23 | ) | $ | (0.01 | ) | $ | (0.12 | ) | $ | (0.13 | ) | ||||
Diluted | $ | (0.23 | ) | $ | (0.01 | ) | $ | (0.12 | ) | $ | (0.13 | ) | ||||
The weighted-average number of anti-dilutive shares excluded from the calculation of diluted loss per common share for the three and nine months ended December 31, 2014 and December 31, 2013 was as follows: | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Options, employee stock purchase plan, restricted stock units and warrants to purchase common stock | 10,944 | 9,144 | 9,678 | 9,538 | ||||||||||||
Due to the loss attributable to the Company’s common stockholders for both the three and nine months ended December 31, 2014 and December 31, 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. | ||||||||||||||||
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 $5.5 million and $3.2 million as of December 31, 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 December 31, 2014 and March 31, 2014, the inventory reserve as a result of the Company’s net realizable value analyses was $0 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 December 31, 2014 and December 31, 2013, impairment charges for all impaired RealD Cinema Systems charged to cost of revenue totaled $1.3 million and $0.8 million, respectively. For the nine months ended December 31, 2014 and December 31, 2013, impairment charges for all impaired RealD Cinema Systems charged to cost of revenue totaled $2.7 million and $3.5 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 (FASB) Accounting Standards Codification (ASC) Topic 840, Leases, and ASC 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 and nine months ended December 31, 2014 and December 31, 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 $0.6 million and $1.6 million for the three months ended December 31, 2014 and December 31, 2013, respectively. Shipping and handling costs recognized in cost of revenue were $3.6 million and $5.5 million for the nine months ended December 31, 2014 and December 31, 2013, respectively. | ||||||||||||||||
Research and development | ||||||||||||||||
Research and development (R&D) costs are expensed as incurred. Major components of R&D expense include salaries and benefits, materials and supplies inclusive of prototypes, non-recurring engineering, payments to third parties for R&D, facilities and equipment that can only be used for a particular project and overhead allocations of various administrative and facilities costs related to R&D. | ||||||||||||||||
Recent accounting pronouncements | ||||||||||||||||
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2014-09 Revenue from Contracts with Customers (Topic 606), effective for RealD starting April 1, 2017 (the first quarter of fiscal year 2018). Early application is not permitted. The new standard will be implemented retrospectively with the Company choosing to either restate prior periods or recognize the cumulative effect; the Company has not yet selected a transition method. | ||||||||||||||||
The new Topic 606 does not apply to lease contracts within the scope of Topic 840 Leases. The primary 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. Revenue recognition is anticipated to entail more judgment and more estimating than under the current guidance. ASU 2014-09 also changes Topic 360 Property, Plant and Equipment, Topic 350 Intangibles-Goodwill and Other and certain other U.S. GAAP. The Company has not yet determined the effects of Topic 606 and other ASU 2014-09 revisions on its consolidated financial statements. | ||||||||||||||||
In June 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period." ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, and early adoption is permitted. The Company adopted the provisions of ASU 2014-12 in the third quarter of fiscal year 2015. The Company’s adoption is not expected to have any material impact on its consolidated financial statements. The Company already follows the accepted accounting within ASU 2014-12 for stock compensation terms within the scope of this clarifying guidance. | ||||||||||||||||
Reclassifications | ||||||||||||||||
Certain amounts presented in prior years have been reclassified to conform to the current year's presentation. |
Cinema_Systems_and_Property_Eq
Cinema Systems and Property & Equipment | 9 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Cinema Systems and Property & Equipment | Cinema Systems and Property & Equipment | |||||||
Tangible fixed assets consist of the following: | ||||||||
December 31, | March 31, | |||||||
(in thousands) | 2014 | 2014 | ||||||
RealD Cinema Systems | 211,454 | $ | 205,632 | |||||
Leasehold improvements | 17,457 | 16,935 | ||||||
Machinery and equipment | 7,623 | 4,753 | ||||||
Furniture and fixtures | 1,258 | 1,272 | ||||||
Computer equipment and software | 10,139 | 9,197 | ||||||
Construction in process | 674 | 1,554 | ||||||
Total | $ | 248,605 | $ | 239,343 | ||||
Less accumulated depreciation | (135,059 | ) | (110,060 | ) | ||||
Cinema Systems and Property & Equipment, net | $ | 113,546 | $ | 129,283 | ||||
Depreciation expense amounted to $9.6 million and $10.0 million for the three months ended December 31, 2014 and December 31, 2013, respectively. Depreciation expense amounted to $29.0 million and $29.1 million for the nine months ended December 31, 2014 and December 31, 2013, respectively. |
Fair_value_measurement
Fair value measurement | 9 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair value measurement | Fair value measurement | ||||||||||||||||
The Company’s derivative instruments are recorded at fair value in other current assets and other current liabilities 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. | |||||||||||||||||
To estimate the fair value of the derivative instruments, the Company uses valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the source of inputs as follows: | |||||||||||||||||
• | Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access; | ||||||||||||||||
• | Level 2 - Valuations for which all significant inputs are observable, either directly or indirectly, other than level 1 inputs; | ||||||||||||||||
• | Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | ||||||||||||||||
The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement. | |||||||||||||||||
The Company purchases foreign currency forward contracts, generally with maturities of twelve months or less, to reduce the volatility of cash flows primarily related to forcasted payments and expenses denominated in certain foreign currencies. As of December 31, 2014, RealD had outstanding forward contracts based on Great Britain Pound and Euro with notional amounts totaling $4.8 million. The fair value measurement of the derivative instruments was as follows: | |||||||||||||||||
(in thousands) | |||||||||||||||||
Fair value measurement as of December 31, 2014, using: | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs | Significant unobservable inputs | Total | |||||||||||||
(Level 2) | (Level 3) | ||||||||||||||||
Assets: | |||||||||||||||||
Derivatives: | |||||||||||||||||
Foreign currency forward contracts | $ | — | $ | 270 | $ | — | $ | 270 | |||||||||
Total assets | $ | — | $ | 270 | $ | — | $ | 270 | |||||||||
Liabilities: | |||||||||||||||||
Derivatives: | |||||||||||||||||
Foreign currency forward contracts | $ | — | $ | — | $ | — | $ | — | |||||||||
Total liabilities | $ | — | $ | — | $ | — | $ | — | |||||||||
As of March 31, 2014, the carrying amounts of the Company’s foreign currency forward contracts were not significant. | |||||||||||||||||
For the three and nine months ended December 31, 2014, the net gain related to the change in fair value of the Company's foreign currency forward contracts was $0.2 million and $0.3 million, respectively. For both the three and nine months ended ended December 31, 2013, the net gain (loss) related to the change in fair value of the Company’s foreign currency forward contracts was immaterial. Foreign currency master agreements typically allow the netting of receivables and payables. The Company had a net receivable of $0.3 million as of December 31, 2014 and any such amounts were not significant as of March 31, 2014. | |||||||||||||||||
The Company monitors its positions with, and the credit quality of, the financial institutions that are counterparties to its financial instruments and does not currently anticipate nonperformance by the counterparties. |
2014_Cost_Reduction_Plan
2014 Cost Reduction Plan | 9 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||
2014 Cost Reduction Plan | 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”). 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 continue to slow. In accordance with 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 motion picture exhibitors, 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, including ASC 420, Exit or Disposal Cost Obligations, ASC 712, Compensation-Nonretirement Postemployment Benefits, ASC 840, Leases 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 and commencement of the relocation of manufacturing, the Company incurred termination and other charges totaling approximately $4.7 million for the fiscal year ended March 31, 2014. Charges of $0.9 million have been incurred in the nine months ended December 31, 2014, including $0.3 million for the accrual of losses on a lease for manufacturing facilities that will no longer be used in the Company’s operations. Therefore, the total charges were $5.6 million through December 31, 2014. The following tables summarizes the charges resulting from implementation of the 2014 Cost Reduction Plan during the three and nine months ended December 31, 2014 and December 31, 2013 : | ||||||||||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||
December 31, 2014 | December 31, 2014 | |||||||||||||||||||||||
(in thousands) | Personnel | Leasehold | Total | Personnel | Leasehold | Total | ||||||||||||||||||
Cost of revenue | $ | 1 | $ | 132 | $ | 133 | $ | 25 | $ | 505 | $ | 530 | ||||||||||||
Research and development | 115 | — | 115 | 115 | — | 115 | ||||||||||||||||||
Selling and marketing | 59 | — | 59 | 75 | — | 75 | ||||||||||||||||||
General and administrative | 2 | — | 2 | 192 | — | 192 | ||||||||||||||||||
Total | $ | 177 | $ | 132 | $ | 309 | $ | 407 | $ | 505 | $ | 912 | ||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||
December 31, 2013 | December 31, 2013 | |||||||||||||||||||||||
(in thousands) | Personnel | Leasehold | Total | Personnel | Leasehold | Total | ||||||||||||||||||
Cost of revenue | $ | 842 | $ | — | $ | 842 | $ | 842 | $ | — | $ | 842 | ||||||||||||
Research and development | 755 | — | 755 | 755 | — | 755 | ||||||||||||||||||
Selling and marketing | 1,104 | — | 1,104 | 1,104 | — | 1,104 | ||||||||||||||||||
General and administrative | 956 | — | 956 | 956 | — | 956 | ||||||||||||||||||
Total | $ | 3,657 | $ | — | $ | 3,657 | $ | 3,657 | $ | — | $ | 3,657 | ||||||||||||
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 | $ | 407 | $ | 505 | 912 | |||||||||||||||||||
(Payments) | (877 | ) | (240 | ) | (1,117 | ) | ||||||||||||||||||
Cost reduction plan liabilities as of December 31, 2014 | $ | 946 | $ | 265 | $ | 1,211 | ||||||||||||||||||
On December 4, 2014, the Company announced a plan for additional cost savings through operating expense savings and capital expenditure reductions for fiscal year 2016. The Company has not implemented these cost reduction initiatives yet, and there is no guarantee that any cost reduction will actually be achieved. | ||||||||||||||||||||||||
Additionally, the Company leases office space for its headquarters that includes approximately $5.5 million in leasehold improvements and other items classified as fixed assets (see Note 4 “Cinema Systems and Property & Equipment”). If the Company relocated the office, these fixed assets could become subject to an impairment assessment and contract termination costs or sublease loss could be incurred. | ||||||||||||||||||||||||
There is no guarantee that termination and implementation costs will not exceed the estimates, or that any net cost reduction will actually be achieved. |
Borrowings
Borrowings | 9 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Borrowings | 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 (the "2012 Credit Agreement"). | ||||||||
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; 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, 2015. | |||||||
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 2012 Credit Agreement. All these issuance costs are being amortized over the contractual life of the Revolving Facility and recorded as interest expense. | ||||||||
Loans outstanding under the 2014 Credit Agreement bear interest at the Company’s option at either the Eurodollar 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 December 31, 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 December 31, 2014, $50 million was available under the Revolving Facility and $12.7 million was available under the Term Loan Facility, totaling $62.7 million of availability under the 2014 Credit Agreement. | ||||||||
As of December 31, 2014, there was no balance outstanding under the Revolving Facility. The term loan outstanding balance of $31.7 million at December 31, 2014 is to be repaid in 13 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 December 31, 2014 and March 31, 2014 were as follows: | ||||||||
December 31, | March 31, | |||||||
2014 | 2014 | |||||||
(in thousands) | ||||||||
Current portion of Credit Agreement | $ | 7,460 | $ | 12,500 | ||||
Credit Agreement, net of current portion | 24,245 | 23,750 | ||||||
Total Credit Agreement | $ | 31,705 | $ | 36,250 | ||||
At December 31, 2014, the Company’s future minimum 2014 Credit Agreement obligations were as follows: | ||||||||
Fiscal year 2015 | $ | 1,865 | ||||||
Fiscal year 2016 | 7,460 | |||||||
Fiscal year 2017 | 7,460 | |||||||
Fiscal year 2018 | 7,460 | |||||||
Fiscal year 2019 | 7,460 | |||||||
Total | $ | 31,705 | ||||||
As of December 31, 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 2012 Credit Agreement which bore interest at 2.88%. Interest expense related to our borrowings was $0.4 million and $0.5 million for the three months ended December 31, 2014 and December 31, 2013, respectively. Interest expense related to our borrowings was $1.1 million and $1.8 million for the nine months ended December 31, 2014 and December 31, 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 December 31, 2014, RealD was in compliance with all financial covenants in the 2014 Credit Agreement. If the Company fails to comply with any of the covenants or if any other event of default should occur, the 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 | 9 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 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 Delaware. 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 $3.8 million at December 31, 2014 and include revolving 90-day supply commitments. Many of the contracts contain cancellation penalty provisions requiring payment of up to 20.0% of the unused contract. | |
Contingencies and assessments | |
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 | 9 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||
Share-based compensation | 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 and nine months ended December 31, 2014 and December 31, 2013 was as follows: | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Share-based compensation | ||||||||||||||||
Cost of revenue | $ | 317 | $ | 181 | $ | 932 | $ | 722 | ||||||||
Research and development | 797 | 632 | 2,473 | 2,107 | ||||||||||||
Selling and marketing | 599 | 1,608 | 2,228 | 4,189 | ||||||||||||
General and administrative | 1,569 | 2,066 | 5,882 | 6,587 | ||||||||||||
Total | $ | 3,282 | $ | 4,487 | $ | 11,515 | $ | 13,605 | ||||||||
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 nine months ended December 31, 2014, the Company granted 0.6 million stock options at a weighted average grant date fair value of $5.90 per share. For the three months ended December 31, 2014 and December 31, 2013, share-based compensation expense related to stock options and the Company’s employee stock purchase plan was $1.8 million and $3.2 million, respectively. For the nine months ended December 31, 2014 and December 31, 2013, share-based compensation expense related to stock options and the Company’s employee stock purchase plan was $6.3 million and $10.3 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 the Company. 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 both the three and nine months ended December 31, 2014, share based compensation expense related to performance stock options were $0.2 million. For the three and nine months ended December 31, 2013, share-based compensation expense related to performance stock options were $0.1 million 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 December 31, 2014 and December 31, 2013, share-based compensation expense related to performance stock units was $17 thousand and $0, respectively. For the nine months ended December 31, 2014 and December 31, 2013, share-based compensation expense related to performance stock units was $1.0 million and $0, respectively. | ||||||||||||||||
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 nine months ended December 31, 2014, the Company granted 1.2 million restricted stock units at a weighted average grant date fair value of $11.17 per restricted stock unit. For the three months ended December 31, 2014 and December 31, 2013, share-based compensation expense related to restricted stock units was $1.5 million and $0.9 million, respectively. For the nine months ended December 31, 2014 and December 31, 2013, share-based compensation expense related to restricted stock units was $4.1 million and $2.2 million, respectively. |
Income_taxes
Income taxes | 9 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes |
The Company’s income tax expense for the three months ended December 31, 2014 and December 31, 2013 was $1.2 million and $1.6 million, respectively. The decrease in income tax expense for the three months ended December 31, 2014 was due primarily to decreased quarterly revenue in foreign jurisdictions where the Company is subject to foreign income taxes. The Company’s income tax expense for the nine months ended December 31, 2014 and December 31, 2013 was $5.1 million and $4.9 million, respectively. 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 December 31, 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 | 9 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Equity [Abstract] | ||||||||||||
Equity | Equity | |||||||||||
A summary of the changes in total equity for the nine months ended December 31, 2014 was as follows: | ||||||||||||
RealD Inc. | Noncontrolling | Total | ||||||||||
stockholders’ | ||||||||||||
(in thousands) | equity | interest | equity | |||||||||
Balance, March 31, 2014 | $ | 151,412 | $ | (578 | ) | $ | 150,834 | |||||
Share-based compensation | 11,515 | — | 11,515 | |||||||||
Exercise of stock options | 2,782 | — | 2,782 | |||||||||
Purchase and distribution of stock under employee stock purchase plan | 291 | — | 291 | |||||||||
Repurchase of statutory withholdings of stock issued for restricted stock units | (990 | ) | — | (990 | ) | |||||||
Comprehensive income: | ||||||||||||
Other comprehensive income, net of tax | 1,810 | — | 1,810 | |||||||||
Net loss | (6,112 | ) | — | (6,112 | ) | |||||||
Total comprehensive income | (4,302 | ) | — | (4,302 | ) | |||||||
Balance, December 31, 2014 | $ | 160,708 | $ | (578 | ) | $ | 160,130 | |||||
Summary_of_significant_account1
Summary of significant accounting policies (Policies) | 9 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
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; | |
• | effect of customer contract terms on revenue and balance sheet items; | |
• | 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; | |
• | valuation of accruals and allowances; | |
• | contingency assessments; 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. | ||
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. | ||
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 December 31, 2014 and March 31, 2014, the inventory reserve as a result of the Company’s net realizable value analyses was $0 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. | ||
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 (FASB) Accounting Standards Codification (ASC) Topic 840, Leases, and ASC 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 and nine months ended December 31, 2014 and December 31, 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. | ||
Recent accounting pronouncements | Recent accounting pronouncements | |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2014-09 Revenue from Contracts with Customers (Topic 606), effective for RealD starting April 1, 2017 (the first quarter of fiscal year 2018). Early application is not permitted. The new standard will be implemented retrospectively with the Company choosing to either restate prior periods or recognize the cumulative effect; the Company has not yet selected a transition method. | ||
The new Topic 606 does not apply to lease contracts within the scope of Topic 840 Leases. The primary 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. Revenue recognition is anticipated to entail more judgment and more estimating than under the current guidance. ASU 2014-09 also changes Topic 360 Property, Plant and Equipment, Topic 350 Intangibles-Goodwill and Other and certain other U.S. GAAP. The Company has not yet determined the effects of Topic 606 and other ASU 2014-09 revisions on its consolidated financial statements. | ||
In June 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period." ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, and early adoption is permitted. The Company adopted the provisions of ASU 2014-12 in the third quarter of fiscal year 2015. The Company’s adoption is not expected to have any material impact on its consolidated financial statements. The Company already follows the accepted accounting within ASU 2014-12 for stock compensation terms within the scope of this clarifying guidance. | ||
Reclassifications | ||
Certain amounts presented in prior years have been reclassified to conform to the current year's presentation. | ||
Derivatives | The Company’s derivative instruments are recorded at fair value in other current assets and other current liabilities 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. |
Effect_of_certain_correction_o1
Effect of certain correction on certain financial statements (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||
Schedule of corrections | The effect of the correction on certain financial statement captions within the Company's Condensed Consolidated Statements of Operations was as follows: | ||||||||||||||||||||||||
Three months ended June 30, 2014 | |||||||||||||||||||||||||
As Reported | Adjustments | Restated Amounts | |||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
License | $ | 35,973 | $ | (160 | ) | $ | 35,813 | ||||||||||||||||||
Product and other | 19,406 | — | 19,406 | ||||||||||||||||||||||
Total revenue | 55,379 | (160 | ) | 55,219 | |||||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||||
License | 10,897 | (49 | ) | 10,848 | |||||||||||||||||||||
Product and other | 14,499 | (149 | ) | 14,350 | |||||||||||||||||||||
Total cost of revenue | 25,396 | (198 | ) | 25,198 | |||||||||||||||||||||
Gross profit | 29,983 | 38 | 30,021 | ||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||
Research and development | 3,790 | (72 | ) | 3,718 | |||||||||||||||||||||
Selling and marketing | 5,791 | (10 | ) | 5,781 | |||||||||||||||||||||
General and administrative | 12,344 | (350 | ) | 11,994 | |||||||||||||||||||||
Total operating expenses | 21,925 | (432 | ) | 21,493 | |||||||||||||||||||||
Operating income | 8,058 | 470 | 8,528 | ||||||||||||||||||||||
Interest expense, net | (430 | ) | (42 | ) | (472 | ) | |||||||||||||||||||
Other income | 160 | — | 160 | ||||||||||||||||||||||
Income before income taxes | 7,788 | 428 | 8,216 | ||||||||||||||||||||||
Income tax expense | 2,287 | — | 2,287 | ||||||||||||||||||||||
Net income | 5,501 | 428 | 5,929 | ||||||||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | ||||||||||||||||||||||
Net income attributable to RealD Inc. common stockholders | $ | 5,501 | $ | 428 | $ | 5,929 | |||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||||
Basic | $ | 0.11 | $ | 0.01 | $ | 0.12 | |||||||||||||||||||
Diluted | $ | 0.1 | $ | 0.01 | $ | 0.11 | |||||||||||||||||||
Three months ended September 30, 2014 | Six months ended September 30, 2014 | ||||||||||||||||||||||||
As Reported | Adjustments | Restated Amounts | As Reported | Adjustments | Restated Amounts | ||||||||||||||||||||
(In thousands, except per share data) | (In thousands, except per share data) | ||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
License | $ | 31,834 | $ | 356 | $ | 32,190 | $ | 67,807 | $ | 196 | $ | 68,003 | |||||||||||||
Product and other | 15,578 | — | 15,578 | 34,984 | — | 34,984 | |||||||||||||||||||
Total revenue | 47,412 | 356 | 47,768 | 102,791 | 196 | 102,987 | |||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||||
License | 11,613 | (336 | ) | 11,277 | 22,510 | (385 | ) | 22,125 | |||||||||||||||||
Product and other | 10,892 | 47 | 10,939 | 25,391 | (102 | ) | 25,289 | ||||||||||||||||||
Total cost of revenue | 22,505 | (289 | ) | 22,216 | 47,901 | (487 | ) | 47,414 | |||||||||||||||||
Gross profit | 24,907 | 645 | 25,552 | 54,890 | 683 | 55,573 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||
Research and development | 6,425 | (33 | ) | 6,392 | 10,215 | (105 | ) | 10,110 | |||||||||||||||||
Selling and marketing | 5,414 | (84 | ) | 5,330 | 11,205 | (94 | ) | 11,111 | |||||||||||||||||
General and administrative | 11,168 | (12 | ) | 11,156 | 23,512 | (362 | ) | 23,150 | |||||||||||||||||
Total operating expenses | 23,007 | (129 | ) | 22,878 | 44,932 | (561 | ) | 44,371 | |||||||||||||||||
Operating income | 1,900 | 774 | 2,674 | 9,958 | 1,244 | 11,202 | |||||||||||||||||||
Interest expense, net | (455 | ) | 42 | (413 | ) | (885 | ) | — | (885 | ) | |||||||||||||||
Other loss | (1,336 | ) | — | (1,336 | ) | (1,176 | ) | — | (1,176 | ) | |||||||||||||||
Income before income taxes | 109 | 816 | 925 | 7,897 | 1,244 | 9,141 | |||||||||||||||||||
Income tax expense | 1,676 | — | 1,676 | 3,963 | — | 3,963 | |||||||||||||||||||
Net income (loss) | (1,567 | ) | 816 | (751 | ) | 3,934 | 1,244 | 5,178 | |||||||||||||||||
Net income (loss) attributable to noncontrolling interest | — | — | — | — | — | — | |||||||||||||||||||
Net income (loss) attributable to RealD Inc. common stockholders | $ | (1,567 | ) | $ | 816 | $ | (751 | ) | $ | 3,934 | $ | 1,244 | $ | 5,178 | |||||||||||
Earnings (loss) per common share: | |||||||||||||||||||||||||
Basic | $ | (0.03 | ) | $ | 0.01 | $ | (0.02 | ) | $ | 0.08 | $ | 0.02 | $ | 0.1 | |||||||||||
Diluted | $ | (0.03 | ) | $ | 0.01 | $ | (0.02 | ) | $ | 0.08 | $ | 0.02 | $ | 0.1 | |||||||||||
The effect of the correction on certain financial statement captions within the Company's Condensed Consolidated Balance Sheet was as follows: | |||||||||||||||||||||||||
As of June 30, 2014 | |||||||||||||||||||||||||
As Reported | Adjustments | Restated Amounts | |||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 27,841 | $ | 1,865 | $ | 29,706 | |||||||||||||||||||
Accounts receivable, net | 59,818 | (342 | ) | 59,476 | |||||||||||||||||||||
Inventories | 7,807 | 90 | 7,897 | ||||||||||||||||||||||
Prepaid expenses and other current assets | 4,834 | (47 | ) | 4,787 | |||||||||||||||||||||
Total current assets | 101,013 | 1,566 | 102,579 | ||||||||||||||||||||||
Cinema systems, net | 100,355 | 2,651 | 103,006 | ||||||||||||||||||||||
Other assets | 7,230 | (107 | ) | 7,123 | |||||||||||||||||||||
Total assets | $ | 253,421 | $ | 4,110 | $ | 257,531 | |||||||||||||||||||
Accrued expenses and other liabilities | $ | 20,505 | $ | 2,123 | $ | 22,628 | |||||||||||||||||||
Deferred revenue | 7,046 | (300 | ) | 6,746 | |||||||||||||||||||||
Current portion of Credit Agreement | 7,460 | 1,865 | 9,325 | ||||||||||||||||||||||
Total current liabilities | 52,638 | 3,688 | 56,326 | ||||||||||||||||||||||
Total liabilities | 91,106 | 3,688 | 94,794 | ||||||||||||||||||||||
Accumulated deficit | (196,262 | ) | 159 | (196,103 | ) | ||||||||||||||||||||
Accumulated other comprehensive income | 261 | 263 | 524 | ||||||||||||||||||||||
Total RealD Inc. stockholders’ equity | 162,893 | 422 | 163,315 | ||||||||||||||||||||||
Total equity | 162,315 | 422 | 162,737 | ||||||||||||||||||||||
Total liabilities and equity | $ | 253,421 | $ | 4,110 | $ | 257,531 | |||||||||||||||||||
As of September 30, 2014 | |||||||||||||||||||||||||
As Reported | Adjustments | Restated Amounts | |||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 49,903 | $ | — | $ | 49,903 | |||||||||||||||||||
Accounts receivable, net | 40,600 | (178 | ) | 40,422 | |||||||||||||||||||||
Inventories | 7,704 | 90 | 7,794 | ||||||||||||||||||||||
Total current assets | 103,238 | (88 | ) | 103,150 | |||||||||||||||||||||
Cinema systems, net | 96,106 | 1,725 | 97,831 | ||||||||||||||||||||||
Total assets | $ | 250,989 | $ | 1,637 | $ | 252,626 | |||||||||||||||||||
Accrued expenses and other liabilities | $ | 22,332 | $ | 899 | $ | 23,231 | |||||||||||||||||||
Deferred revenue | 6,673 | (117 | ) | 6,556 | |||||||||||||||||||||
Total current liabilities | 50,074 | 782 | 50,856 | ||||||||||||||||||||||
Total liabilities | 85,418 | 782 | 86,200 | ||||||||||||||||||||||
Accumulated deficit | (197,829 | ) | 547 | (197,282 | ) | ||||||||||||||||||||
Accumulated other comprehensive income | 425 | 308 | 733 | ||||||||||||||||||||||
Total RealD Inc. stockholders’ equity | 166,149 | 855 | 167,004 | ||||||||||||||||||||||
Total equity | 165,571 | 855 | 166,426 | ||||||||||||||||||||||
Total liabilities and equity | $ | 250,989 | $ | 1,637 | $ | 252,626 | |||||||||||||||||||
The effect of the correction on certain financial statement captions within the Company's Condensed Consolidated Statement of Cash Flow was as follows: | |||||||||||||||||||||||||
Three months ended June 30, 2014 | Six months ended September 30, 2014 | ||||||||||||||||||||||||
As Reported | Adjustments | Restated Amounts | As Reported | Adjustments | Restated Amounts | ||||||||||||||||||||
Cash flows from operating activities | |||||||||||||||||||||||||
Net income | $ | 5,501 | $ | 428 | $ | 5,929 | $ | 3,934 | $ | 1,244 | $ | 5,178 | |||||||||||||
Adjustments to reconcile net income to net cash provided (used) by operating activities: | |||||||||||||||||||||||||
Depreciation and amortization | 9,813 | — | 9,813 | 20,223 | (218 | ) | 20,005 | ||||||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||||||
Accounts receivable | (11,396 | ) | 342 | (11,054 | ) | 7,822 | 178 | 8,000 | |||||||||||||||||
Inventories | 1,302 | (90 | ) | 1,212 | 1,405 | (90 | ) | 1,315 | |||||||||||||||||
Prepaid expenses and other current assets | 1,273 | 47 | 1,320 | 237 | — | 237 | |||||||||||||||||||
Other assets | (2,390 | ) | 107 | (2,283 | ) | (2,316 | ) | — | (2,316 | ) | |||||||||||||||
Accrued expenses and other liabilities | (1,429 | ) | 2,123 | 694 | 436 | 899 | 1,335 | ||||||||||||||||||
Deferred revenue | (1,913 | ) | (300 | ) | (2,213 | ) | (2,998 | ) | (117 | ) | (3,115 | ) | |||||||||||||
Net cash provided by operating activities | 4,106 | 2,657 | 6,763 | 32,933 | 1,896 | 34,829 | |||||||||||||||||||
Cash flows from investing activities | |||||||||||||||||||||||||
Purchases of property and equipment | (2,632 | ) | (263 | ) | (2,895 | ) | (3,448 | ) | — | (3,448 | ) | ||||||||||||||
Purchases of cinema systems and related components | (2,799 | ) | (2,388 | ) | (5,187 | ) | (7,456 | ) | (1,507 | ) | (8,963 | ) | |||||||||||||
Net cash used in investing activities | (5,364 | ) | (2,651 | ) | (8,015 | ) | (10,825 | ) | (1,507 | ) | (12,332 | ) | |||||||||||||
Cash flows from financing activities | |||||||||||||||||||||||||
Repayments on Credit Agreement | (38,115 | ) | 1,865 | (36,250 | ) | (39,980 | ) | — | (39,980 | ) | |||||||||||||||
Repayments on tax withholding of restricted stock units | — | (269 | ) | (269 | ) | — | (697 | ) | (697 | ) | |||||||||||||||
Net cash provided (used) by financing activities | 300 | 1,596 | 1,896 | (1,168 | ) | (697 | ) | (1,865 | ) | ||||||||||||||||
Effect of currency exchange rate changes on cash and cash equivalent | (1 | ) | 263 | 262 | 163 | 308 | 471 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (959 | ) | 1,865 | 906 | 21,103 | — | 21,103 | ||||||||||||||||||
Cash and cash equivalents, beginning of period | 28,800 | — | 28,800 | 28,800 | — | 28,800 | |||||||||||||||||||
Cash and cash equivalents, end of period | $ | 27,841 | $ | 1,865 | $ | 29,706 | $ | 49,903 | $ | — | $ | 49,903 | |||||||||||||
The effect of the correction on certain financial statement captions within the Company's Condensed Consolidated Statements of Comprehensive Income (Loss) were not material for any previously reported periods. |
Summary_of_significant_account2
Summary of significant accounting policies (Tables) | 9 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Schedule of Calculation of the Basic and Diluted Loss Per Share of Common Stock | The calculation of the basic and diluted loss per share of common stock for the three and nine months ended December 31, 2014 and December 31, 2013 was as follows: | |||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(in thousands, except share and per share data) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Numerator: | ||||||||||||||||
Net loss | $ | (11,290 | ) | $ | (155 | ) | (6,112 | ) | (6,355 | ) | ||||||
Net income attributable to noncontrolling interest | — | (116 | ) | — | (101 | ) | ||||||||||
Net loss attributable to RealD Inc. common stockholders | $ | (11,290 | ) | $ | (271 | ) | $ | (6,112 | ) | $ | (6,456 | ) | ||||
Denominator: | ||||||||||||||||
Weighted-average common shares outstanding (basic) | 49,771 | 49,325 | 49,935 | 49,459 | ||||||||||||
Effect of dilutive securities | — | — | — | — | ||||||||||||
Weighted-average common shares outstanding (diluted) | 49,771 | 49,325 | 49,935 | 49,459 | ||||||||||||
Loss per common share: | ||||||||||||||||
Basic | $ | (0.23 | ) | $ | (0.01 | ) | $ | (0.12 | ) | $ | (0.13 | ) | ||||
Diluted | $ | (0.23 | ) | $ | (0.01 | ) | $ | (0.12 | ) | $ | (0.13 | ) | ||||
Schedule of Weighted-Average Number of Anti-Dilutive Shares Excluded From the Calculation of Diluted Loss Per Common Share | The weighted-average number of anti-dilutive shares excluded from the calculation of diluted loss per common share for the three and nine months ended December 31, 2014 and December 31, 2013 was as follows: | |||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Options, employee stock purchase plan, restricted stock units and warrants to purchase common stock | 10,944 | 9,144 | 9,678 | 9,538 | ||||||||||||
Cinema_Systems_and_Property_Eq1
Cinema Systems and Property & Equipment (Tables) | 9 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Schedule of Property and Equipment of RealD Cinema Systems and Digital Projectors | Tangible fixed assets consist of the following: | |||||||
December 31, | March 31, | |||||||
(in thousands) | 2014 | 2014 | ||||||
RealD Cinema Systems | 211,454 | $ | 205,632 | |||||
Leasehold improvements | 17,457 | 16,935 | ||||||
Machinery and equipment | 7,623 | 4,753 | ||||||
Furniture and fixtures | 1,258 | 1,272 | ||||||
Computer equipment and software | 10,139 | 9,197 | ||||||
Construction in process | 674 | 1,554 | ||||||
Total | $ | 248,605 | $ | 239,343 | ||||
Less accumulated depreciation | (135,059 | ) | (110,060 | ) | ||||
Cinema Systems and Property & Equipment, net | $ | 113,546 | $ | 129,283 | ||||
Fair_value_measurement_Tables
Fair value measurement (Tables) | 9 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Schedule of Fair Value of the Derivative Instruments | The fair value measurement of the derivative instruments was as follows: | ||||||||||||||||
(in thousands) | |||||||||||||||||
Fair value measurement as of December 31, 2014, using: | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs | Significant unobservable inputs | Total | |||||||||||||
(Level 2) | (Level 3) | ||||||||||||||||
Assets: | |||||||||||||||||
Derivatives: | |||||||||||||||||
Foreign currency forward contracts | $ | — | $ | 270 | $ | — | $ | 270 | |||||||||
Total assets | $ | — | $ | 270 | $ | — | $ | 270 | |||||||||
Liabilities: | |||||||||||||||||
Derivatives: | |||||||||||||||||
Foreign currency forward contracts | $ | — | $ | — | $ | — | $ | — | |||||||||
Total liabilities | $ | — | $ | — | $ | — | $ | — | |||||||||
2014_Cost_Reduction_Plan_Table
2014 Cost Reduction Plan (Tables) | 9 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||
Summary of Charges Resulting from Implementation of the Cost Reduction Plan | The following tables summarizes the charges resulting from implementation of the 2014 Cost Reduction Plan during the three and nine months ended December 31, 2014 and December 31, 2013 : | |||||||||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||
December 31, 2014 | December 31, 2014 | |||||||||||||||||||||||
(in thousands) | Personnel | Leasehold | Total | Personnel | Leasehold | Total | ||||||||||||||||||
Cost of revenue | $ | 1 | $ | 132 | $ | 133 | $ | 25 | $ | 505 | $ | 530 | ||||||||||||
Research and development | 115 | — | 115 | 115 | — | 115 | ||||||||||||||||||
Selling and marketing | 59 | — | 59 | 75 | — | 75 | ||||||||||||||||||
General and administrative | 2 | — | 2 | 192 | — | 192 | ||||||||||||||||||
Total | $ | 177 | $ | 132 | $ | 309 | $ | 407 | $ | 505 | $ | 912 | ||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||
December 31, 2013 | December 31, 2013 | |||||||||||||||||||||||
(in thousands) | Personnel | Leasehold | Total | Personnel | Leasehold | Total | ||||||||||||||||||
Cost of revenue | $ | 842 | $ | — | $ | 842 | $ | 842 | $ | — | $ | 842 | ||||||||||||
Research and development | 755 | — | 755 | 755 | — | 755 | ||||||||||||||||||
Selling and marketing | 1,104 | — | 1,104 | 1,104 | — | 1,104 | ||||||||||||||||||
General and administrative | 956 | — | 956 | 956 | — | 956 | ||||||||||||||||||
Total | $ | 3,657 | $ | — | $ | 3,657 | $ | 3,657 | $ | — | $ | 3,657 | ||||||||||||
Summary of Currently Estimated Charges Resulting from the Cost Reduction Plan Implementation | 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 | $ | 407 | $ | 505 | 912 | |||||||||||||||||||
(Payments) | (877 | ) | (240 | ) | (1,117 | ) | ||||||||||||||||||
Cost reduction plan liabilities as of December 31, 2014 | $ | 946 | $ | 265 | $ | 1,211 | ||||||||||||||||||
Borrowings_Tables
Borrowings (Tables) | 9 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Schedule of the Current and Non-Current Portions of the Credit Agreement | The current and non-current portions of the Credit Agreement due as of December 31, 2014 and March 31, 2014 were as follows: | |||||||
December 31, | March 31, | |||||||
2014 | 2014 | |||||||
(in thousands) | ||||||||
Current portion of Credit Agreement | $ | 7,460 | $ | 12,500 | ||||
Credit Agreement, net of current portion | 24,245 | 23,750 | ||||||
Total Credit Agreement | $ | 31,705 | $ | 36,250 | ||||
Schedule of Future Minimum Credit Agreement Obligations | At December 31, 2014, the Company’s future minimum 2014 Credit Agreement obligations were as follows: | |||||||
Fiscal year 2015 | $ | 1,865 | ||||||
Fiscal year 2016 | 7,460 | |||||||
Fiscal year 2017 | 7,460 | |||||||
Fiscal year 2018 | 7,460 | |||||||
Fiscal year 2019 | 7,460 | |||||||
Total | $ | 31,705 | ||||||
Sharebased_compensation_Tables
Share-based compensation (Tables) | 9 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||
Schedule of share-based compensation expense for all share-based arrangements | Share-based compensation expense for all share-based arrangements for the three and nine months ended December 31, 2014 and December 31, 2013 was as follows: | |||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Share-based compensation | ||||||||||||||||
Cost of revenue | $ | 317 | $ | 181 | $ | 932 | $ | 722 | ||||||||
Research and development | 797 | 632 | 2,473 | 2,107 | ||||||||||||
Selling and marketing | 599 | 1,608 | 2,228 | 4,189 | ||||||||||||
General and administrative | 1,569 | 2,066 | 5,882 | 6,587 | ||||||||||||
Total | $ | 3,282 | $ | 4,487 | $ | 11,515 | $ | 13,605 | ||||||||
Equity_Tables
Equity (Tables) | 9 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Equity [Abstract] | ||||||||||||
Summary of the changes in total equity | A summary of the changes in total equity for the nine months ended December 31, 2014 was as follows: | |||||||||||
RealD Inc. | Noncontrolling | Total | ||||||||||
stockholders’ | ||||||||||||
(in thousands) | equity | interest | equity | |||||||||
Balance, March 31, 2014 | $ | 151,412 | $ | (578 | ) | $ | 150,834 | |||||
Share-based compensation | 11,515 | — | 11,515 | |||||||||
Exercise of stock options | 2,782 | — | 2,782 | |||||||||
Purchase and distribution of stock under employee stock purchase plan | 291 | — | 291 | |||||||||
Repurchase of statutory withholdings of stock issued for restricted stock units | (990 | ) | — | (990 | ) | |||||||
Comprehensive income: | ||||||||||||
Other comprehensive income, net of tax | 1,810 | — | 1,810 | |||||||||
Net loss | (6,112 | ) | — | (6,112 | ) | |||||||
Total comprehensive income | (4,302 | ) | — | (4,302 | ) | |||||||
Balance, December 31, 2014 | $ | 160,708 | $ | (578 | ) | $ | 160,130 | |||||
Effect_of_certain_correction_o2
Effect of certain correction on certain financial statements Income Statement (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Revenue: | |||||||
License | $20,958 | $32,190 | $35,813 | $35,619 | $68,003 | $88,961 | $103,901 |
Product and other | 11,613 | 15,578 | 19,406 | 19,819 | 34,984 | 46,597 | 54,685 |
Total revenue | 32,571 | 47,768 | 55,219 | 55,438 | 102,987 | 135,558 | 158,586 |
Cost of revenue: | |||||||
License | 11,487 | 11,277 | 10,848 | 11,472 | 22,125 | 33,612 | 33,981 |
Product and other | 6,121 | 10,939 | 14,350 | 16,696 | 25,289 | 31,410 | 49,248 |
Total cost of revenue | 17,608 | 22,216 | 25,198 | 28,168 | 47,414 | 65,022 | 83,229 |
Gross profit | 14,963 | 25,552 | 30,021 | 27,270 | 55,573 | 70,536 | 75,357 |
Operating expenses: | |||||||
Research and development | 4,582 | 6,392 | 3,718 | 5,236 | 10,110 | 14,692 | 15,465 |
Selling and marketing | 4,382 | 5,330 | 5,781 | 6,842 | 11,111 | 15,493 | 20,295 |
General and administrative | 12,654 | 11,156 | 11,994 | 13,161 | 23,150 | 35,804 | 39,533 |
Total operating expenses | 21,618 | 22,878 | 21,493 | 25,239 | 44,371 | 65,989 | 75,293 |
Operating income (loss) | -6,655 | 2,674 | 8,528 | 2,031 | 11,202 | 4,547 | 64 |
Interest expense, net | -393 | -413 | -472 | -525 | -885 | -1,278 | -1,765 |
Other income (loss) | -3,088 | -1,336 | 160 | -47 | -1,176 | -4,264 | 227 |
Income (loss) before income taxes | -10,136 | 925 | 8,216 | 1,459 | 9,141 | -995 | -1,474 |
Income tax expense | 1,154 | 1,676 | 2,287 | 1,614 | 3,963 | 5,117 | 4,881 |
Net loss | -11,290 | -751 | 5,929 | -155 | 5,178 | -6,112 | -6,355 |
Net income attributable to noncontrolling interest | 0 | 0 | 0 | -116 | 0 | 0 | -101 |
Net loss attributable to RealD Inc. common stockholders | -11,290 | -751 | 5,929 | -271 | 5,178 | -6,112 | -6,456 |
Loss per common share: | |||||||
Basic (in dollars per share) | ($0.23) | ($0.02) | $0.12 | ($0.01) | $0.10 | ($0.12) | ($0.13) |
Diluted (in dollars per share) | ($0.23) | ($0.02) | $0.11 | ($0.01) | $0.10 | ($0.12) | ($0.13) |
Shares used in computing loss per common share: | |||||||
Basic (in shares) | 49,771 | 49,325 | 49,935 | 49,459 | |||
Diluted (in shares) | 49,771 | 49,325 | 49,935 | 49,459 | |||
As Reported | |||||||
Revenue: | |||||||
License | 31,834 | 35,973 | 67,807 | ||||
Product and other | 15,578 | 19,406 | 34,984 | ||||
Total revenue | 47,412 | 55,379 | 102,791 | ||||
Cost of revenue: | |||||||
License | 11,613 | 10,897 | 22,510 | ||||
Product and other | 10,892 | 14,499 | 25,391 | ||||
Total cost of revenue | 22,505 | 25,396 | 47,901 | ||||
Gross profit | 24,907 | 29,983 | 54,890 | ||||
Operating expenses: | |||||||
Research and development | 6,425 | 3,790 | 10,215 | ||||
Selling and marketing | 5,414 | 5,791 | 11,205 | ||||
General and administrative | 11,168 | 12,344 | 23,512 | ||||
Total operating expenses | 23,007 | 21,925 | 44,932 | ||||
Operating income (loss) | 1,900 | 8,058 | 9,958 | ||||
Interest expense, net | -455 | -430 | -885 | ||||
Other income (loss) | -1,336 | 160 | -1,176 | ||||
Income (loss) before income taxes | 109 | 7,788 | 7,897 | ||||
Income tax expense | 1,676 | 2,287 | 3,963 | ||||
Net loss | -1,567 | 5,501 | 3,934 | ||||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | ||||
Net loss attributable to RealD Inc. common stockholders | -1,567 | 5,501 | 3,934 | ||||
Loss per common share: | |||||||
Basic (in dollars per share) | ($0.03) | $0.11 | $0.08 | ||||
Diluted (in dollars per share) | ($0.03) | $0.10 | $0.08 | ||||
Adjustments | |||||||
Revenue: | |||||||
License | 356 | -160 | 196 | ||||
Product and other | 0 | 0 | 0 | ||||
Total revenue | 356 | -160 | 196 | ||||
Cost of revenue: | |||||||
License | -336 | -49 | -385 | ||||
Product and other | 47 | -149 | -102 | ||||
Total cost of revenue | -289 | -198 | -487 | ||||
Gross profit | 645 | 38 | 683 | ||||
Operating expenses: | |||||||
Research and development | -33 | -72 | -105 | ||||
Selling and marketing | -84 | -10 | -94 | ||||
General and administrative | -12 | -350 | -362 | ||||
Total operating expenses | -129 | -432 | -561 | ||||
Operating income (loss) | 774 | 470 | 1,244 | ||||
Interest expense, net | 42 | -42 | 0 | ||||
Other income (loss) | 0 | 0 | 0 | ||||
Income (loss) before income taxes | 816 | 428 | 1,244 | ||||
Income tax expense | 0 | 0 | 0 | ||||
Net loss | 816 | 428 | 1,244 | ||||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | ||||
Net loss attributable to RealD Inc. common stockholders | $816 | $428 | $1,244 | ||||
Loss per common share: | |||||||
Basic (in dollars per share) | $0.01 | $0.01 | $0.02 | ||||
Diluted (in dollars per share) | $0.01 | $0.01 | $0.02 |
Effect_of_certain_correction_o3
Effect of certain correction on certain financial statements Balance Sheet (Details) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 |
In Thousands, unless otherwise specified | ||||||
Cash and cash equivalents | $51,750 | $49,903 | $29,706 | $28,800 | $29,621 | $31,020 |
Accounts receivable, net | 33,385 | 40,422 | 59,476 | 48,422 | ||
Inventories | 6,525 | 7,794 | 7,897 | 9,109 | ||
Prepaid expenses and other current assets | 5,099 | 4,787 | 5,197 | |||
Total current assets | 96,950 | 103,150 | 102,579 | 91,677 | ||
Cinema systems, net | 91,566 | 97,831 | 103,006 | 106,792 | ||
Other assets | 8,792 | 7,123 | 4,840 | |||
Total assets | 239,714 | 252,626 | 257,531 | 247,182 | ||
Accrued expenses and other liabilities | 24,010 | 23,231 | 22,628 | 21,896 | ||
Deferred revenue | 5,295 | 6,556 | 6,746 | 8,143 | ||
Current portion of Credit Agreement | 7,460 | 9,325 | 12,500 | |||
Total current liabilities | 46,988 | 50,856 | 56,326 | 61,087 | ||
Total liabilities | 79,584 | 86,200 | 94,794 | 96,348 | ||
Accumulated deficit | -208,865 | -197,282 | -196,103 | -201,763 | ||
Accumulated other comprehensive income | 2,072 | 733 | 524 | 262 | ||
Total RealD Inc. stockholders’ equity | 160,708 | 167,004 | 163,315 | 151,412 | ||
Total equity | 160,130 | 166,426 | 162,737 | 150,834 | ||
Total liabilities and equity | 239,714 | 252,626 | 257,531 | 247,182 | ||
Adjustments | ||||||
Cash and cash equivalents | 0 | 1,865 | 0 | |||
Accounts receivable, net | -178 | -342 | ||||
Inventories | 90 | 90 | ||||
Prepaid expenses and other current assets | -47 | |||||
Total current assets | -88 | 1,566 | ||||
Cinema systems, net | 1,725 | 2,651 | ||||
Other assets | -107 | |||||
Total assets | 1,637 | 4,110 | ||||
Accrued expenses and other liabilities | 899 | 2,123 | ||||
Deferred revenue | -117 | -300 | ||||
Current portion of Credit Agreement | 1,865 | |||||
Total current liabilities | 782 | 3,688 | ||||
Total liabilities | 782 | 3,688 | ||||
Accumulated deficit | 547 | 159 | ||||
Accumulated other comprehensive income | 308 | 263 | ||||
Total RealD Inc. stockholders’ equity | 855 | 422 | ||||
Total equity | 855 | 422 | ||||
Total liabilities and equity | 1,637 | 4,110 | ||||
As Reported | ||||||
Cash and cash equivalents | 49,903 | 27,841 | 28,800 | |||
Accounts receivable, net | 40,600 | 59,818 | ||||
Inventories | 7,704 | 7,807 | ||||
Prepaid expenses and other current assets | 4,834 | |||||
Total current assets | 103,238 | 101,013 | ||||
Cinema systems, net | 96,106 | 100,355 | ||||
Other assets | 7,230 | |||||
Total assets | 250,989 | 253,421 | ||||
Accrued expenses and other liabilities | 22,332 | 20,505 | ||||
Deferred revenue | 6,673 | 7,046 | ||||
Current portion of Credit Agreement | 7,460 | |||||
Total current liabilities | 50,074 | 52,638 | ||||
Total liabilities | 85,418 | 91,106 | ||||
Accumulated deficit | -197,829 | -196,262 | ||||
Accumulated other comprehensive income | 425 | 261 | ||||
Total RealD Inc. stockholders’ equity | 166,149 | 162,893 | ||||
Total equity | 165,571 | 162,315 | ||||
Total liabilities and equity | $250,989 | $253,421 |
Summary_of_significant_account3
Summary of significant accounting policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
quarter | quarter | ||||||
Accounting period | |||||||
Number of periods in an accounting period | 4 | 4 | |||||
Length of quarter (in months) | 3 months | ||||||
Length of fiscal year (in months) | 12 months | ||||||
Numerator: | |||||||
Net loss | ($11,290) | ($751) | $5,929 | ($155) | $5,178 | ($6,112) | ($6,355) |
Net income attributable to noncontrolling interest | 0 | 0 | 0 | -116 | 0 | 0 | -101 |
Net loss attributable to RealD Inc. common stockholders | ($11,290) | ($751) | $5,929 | ($271) | $5,178 | ($6,112) | ($6,456) |
Denominator: (in shares) | |||||||
Weighted-average common shares outstanding (basic) | 49,771 | 49,325 | 49,935 | 49,459 | |||
Effect of dilutive securities | 0 | 0 | 0 | 0 | |||
Weighted-average common shares outstanding (diluted) | 49,771 | 49,325 | 49,935 | 49,459 | |||
Loss per common share: | |||||||
Basic (in dollars per share) | ($0.23) | ($0.02) | $0.12 | ($0.01) | $0.10 | ($0.12) | ($0.13) |
Diluted (in dollars per share) | ($0.23) | ($0.02) | $0.11 | ($0.01) | $0.10 | ($0.12) | ($0.13) |
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 | 10,944 | 9,144 | 9,678 | 9,538 |
Effect_of_certain_correction_o4
Effect of certain correction on certain financial statements Cash Flows (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Net loss | $5,929 | $5,178 | ($6,112) | ($6,355) |
Depreciation and amortization | 9,813 | 20,005 | 29,925 | 30,082 |
Accounts receivable | -11,054 | 8,000 | 13,916 | -5,872 |
Inventories | 1,212 | 1,315 | 2,269 | 6,079 |
Prepaid expenses and other current assets | 1,320 | 237 | 117 | -1,809 |
Other assets | -2,283 | -2,316 | -3,286 | 114 |
Accrued expenses and other liabilities | 694 | 1,335 | 2,347 | 1,314 |
Deferred revenue | -2,213 | -3,115 | -5,224 | -4,828 |
Net cash provided by operating activities | 6,763 | 34,829 | 40,093 | 21,520 |
Purchases of property and equipment | -2,895 | -3,448 | -4,032 | -3,805 |
Purchases of cinema systems and related components | -5,187 | -8,963 | -12,626 | -15,646 |
Net cash used in investing activities | -8,015 | -12,332 | -16,579 | -19,236 |
Repayments on Credit Agreement | -36,250 | -39,980 | -41,845 | -35,625 |
Repayments on tax withholding of restricted stock units | -269 | -697 | -990 | 0 |
Net cash provided (used) by financing activities | 1,896 | -1,865 | -3,357 | -3,959 |
Effect of currency exchange rate changes on cash and cash equivalent | 262 | 471 | 2,793 | 276 |
Net increase (decrease) in cash and cash equivalents | 906 | 21,103 | 22,950 | -1,399 |
Cash and cash equivalents | 29,706 | 49,903 | 51,750 | 29,621 |
As Reported | ||||
Net loss | 5,501 | 3,934 | ||
Depreciation and amortization | 9,813 | 20,223 | ||
Accounts receivable | -11,396 | 7,822 | ||
Inventories | 1,302 | 1,405 | ||
Prepaid expenses and other current assets | 1,273 | 237 | ||
Other assets | -2,390 | -2,316 | ||
Accrued expenses and other liabilities | -1,429 | 436 | ||
Deferred revenue | -1,913 | -2,998 | ||
Net cash provided by operating activities | 4,106 | 32,933 | ||
Purchases of property and equipment | -2,632 | -3,448 | ||
Purchases of cinema systems and related components | -2,799 | -7,456 | ||
Net cash used in investing activities | -5,364 | -10,825 | ||
Repayments on Credit Agreement | -38,115 | -39,980 | ||
Repayments on tax withholding of restricted stock units | 0 | 0 | ||
Net cash provided (used) by financing activities | 300 | -1,168 | ||
Effect of currency exchange rate changes on cash and cash equivalent | -1 | 163 | ||
Net increase (decrease) in cash and cash equivalents | -959 | 21,103 | ||
Cash and cash equivalents | 27,841 | 49,903 | ||
Adjustments | ||||
Net loss | 428 | 1,244 | ||
Depreciation and amortization | 0 | -218 | ||
Accounts receivable | 342 | 178 | ||
Inventories | -90 | -90 | ||
Prepaid expenses and other current assets | 47 | 0 | ||
Other assets | 107 | 0 | ||
Accrued expenses and other liabilities | 2,123 | 899 | ||
Deferred revenue | -300 | -117 | ||
Net cash provided by operating activities | 2,657 | 1,896 | ||
Purchases of property and equipment | -263 | 0 | ||
Purchases of cinema systems and related components | -2,388 | -1,507 | ||
Net cash used in investing activities | -2,651 | -1,507 | ||
Repayments on Credit Agreement | 1,865 | 0 | ||
Repayments on tax withholding of restricted stock units | -269 | -697 | ||
Net cash provided (used) by financing activities | 1,596 | -697 | ||
Effect of currency exchange rate changes on cash and cash equivalent | 263 | 308 | ||
Net increase (decrease) in cash and cash equivalents | 1,865 | 0 | ||
Cash and cash equivalents | $1,865 | $0 |
Summary_of_significant_account4
Summary of significant accounting policies (Details 2) (USD $) | Dec. 31, 2014 | Mar. 31, 2014 |
Accounts receivable: value added tax (VAT) receivables | ||
Allowance for doubtful accounts and customer credits | $5,500,000 | $3,200,000 |
Inventories and deferred costs-eyewear | ||
Inventory reserve | $0 | $600,000 |
Summary_of_significant_account5
Summary of significant accounting policies (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Impairment of long-lived assets | ||||
Reclassification from accumulated other comprehensive income, current period, net of tax | $0 | $0 | $0 | $0 |
Shipping and handling costs | ||||
Shipping and handling costs | 600,000 | 1,600,000 | 3,600,000 | 5,500,000 |
Cinema systems | ||||
Impairment of long-lived assets | ||||
Impairment charges | $1,300,000 | $800,000 | $2,700,000 | $3,500,000 |
Cinema_Systems_and_Property_Eq2
Cinema Systems and Property & Equipment (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | |
Property and equipment, RealD Cinema Systems and digital projectors | |||||
Total | $248,605,000 | $248,605,000 | $239,343,000 | ||
Less accumulated depreciation | -135,059,000 | -135,059,000 | -110,060,000 | ||
Cinema Systems and Property & Equipment, net | 113,546,000 | 113,546,000 | 129,283,000 | ||
Depreciation expense | 9,600,000 | 10,000,000 | 29,000,000 | 29,100,000 | |
Proceeds from sale of property, plant, and equipment | 79,000 | 215,000 | |||
RealD Cinema Systems | |||||
Property and equipment, RealD Cinema Systems and digital projectors | |||||
Total | 211,454,000 | 211,454,000 | 205,632,000 | ||
Leasehold improvements | |||||
Property and equipment, RealD Cinema Systems and digital projectors | |||||
Total | 17,457,000 | 17,457,000 | 16,935,000 | ||
Machinery and equipment | |||||
Property and equipment, RealD Cinema Systems and digital projectors | |||||
Total | 7,623,000 | 7,623,000 | 4,753,000 | ||
Furniture and fixtures | |||||
Property and equipment, RealD Cinema Systems and digital projectors | |||||
Total | 1,258,000 | 1,258,000 | 1,272,000 | ||
Computer equipment and software | |||||
Property and equipment, RealD Cinema Systems and digital projectors | |||||
Total | 10,139,000 | 10,139,000 | 9,197,000 | ||
Construction in process | |||||
Property and equipment, RealD Cinema Systems and digital projectors | |||||
Total | $674,000 | $674,000 | $1,554,000 |
Fair_value_measurement_Details
Fair value measurement (Details) (USD $) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2014 | Dec. 31, 2014 | |
Foreign exchange forward | ||
Derivative instruments | ||
Gain (loss) on foreign currency derivative instruments not designated as hedging instruments | $200,000 | $300,000 |
Not designated as hedging instrument | ||
Derivative instruments | ||
Derivative asset, fair value, gross asset | 270,000 | 270,000 |
Derivative liability, fair value, gross liability | 0 | 0 |
Not designated as hedging instrument | Fair value, inputs, level 1 | ||
Derivative instruments | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Not designated as hedging instrument | Fair value, inputs, level 2 | ||
Derivative instruments | ||
Derivative asset, fair value, gross asset | 270,000 | 270,000 |
Derivative liability, fair value, gross liability | 0 | 0 |
Not designated as hedging instrument | Fair value, inputs, level 3 | ||
Derivative instruments | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Not designated as hedging instrument | Foreign exchange forward | ||
Derivative instruments | ||
Derivative asset, fair value, gross asset | 270,000 | 270,000 |
Derivative liability, fair value, gross liability | 0 | 0 |
Not designated as hedging instrument | Foreign exchange forward | Fair value, inputs, level 1 | ||
Derivative instruments | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Not designated as hedging instrument | Foreign exchange forward | Fair value, inputs, level 2 | ||
Derivative instruments | ||
Derivative, notional amount | 4,800,000 | 4,800,000 |
Derivative asset, fair value, gross asset | 270,000 | 270,000 |
Derivative liability, fair value, gross liability | 0 | 0 |
Foreign currency forward contracts, maturity period (in months) | 12 months | |
Net receivable | 300,000 | 300,000 |
Not designated as hedging instrument | Foreign exchange forward | Fair value, inputs, level 3 | ||
Derivative instruments | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | $0 | $0 |
2014_Cost_Reduction_Plan_Detai
2014 Cost Reduction Plan (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | |
2014 Cost Reduction Plan | |||||
Percentage of staff reduced under the cost reduction plan | 20.00% | ||||
Cost reduction plan total charges incurred to date | $5,600,000 | ||||
Restructuring charges | 309,000 | 3,657,000 | 912,000 | 3,657,000 | |
Cost of revenue | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 133,000 | 842,000 | 530,000 | 842,000 | |
Research and development | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 115,000 | 755,000 | 115,000 | 755,000 | |
Selling and marketing | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 59,000 | 1,104,000 | 75,000 | 1,104,000 | |
General and administrative | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 2,000 | 956,000 | 192,000 | 956,000 | |
Personnel | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 177,000 | 3,657,000 | 407,000 | 3,657,000 | 4,700,000 |
Personnel | Cost of revenue | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 1,000 | 842,000 | 25,000 | 842,000 | |
Personnel | Research and development | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 115,000 | 755,000 | 115,000 | 755,000 | |
Personnel | Selling and marketing | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 59,000 | 1,104,000 | 75,000 | 1,104,000 | |
Personnel | General and administrative | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 2,000 | 956,000 | 192,000 | 956,000 | |
Leasehold | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 132,000 | 0 | 505,000 | 0 | |
Leasehold | Cost of revenue | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 132,000 | 0 | 505,000 | 0 | |
Leasehold | Research and development | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 0 | 0 | 0 | 0 | |
Leasehold | Selling and marketing | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 0 | 0 | 0 | 0 | |
Leasehold | General and administrative | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | 0 | 0 | 0 | 0 | |
Accrual of Losses [Member] | |||||
2014 Cost Reduction Plan | |||||
Restructuring charges | $300,000 |
2014_Cost_Reduction_Plan_Detai1
2014 Cost Reduction Plan (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 |
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 | ||||
Charges | 309 | 3,657 | 912 | 3,657 | |
(Payments) | -1,117 | ||||
Cost reduction plan liabilities, period end | 1,211 | 1,211 | |||
Impairment | 2,736 | 3,547 | |||
Leasehold improvements | |||||
Summary of currently incurred charges resulting from implementation of the cost reduction plan within accrued expenses and other liabilities | |||||
Impairment | 5,500 | ||||
Personnel | |||||
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 | ||||
Charges | 177 | 3,657 | 407 | 3,657 | 4,700 |
(Payments) | -877 | ||||
Cost reduction plan liabilities, period end | 946 | 946 | 1,416 | ||
Leasehold | |||||
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 | 0 | ||||
Charges | 132 | 0 | 505 | 0 | |
(Payments) | -240 | ||||
Cost reduction plan liabilities, period end | $265 | $265 |
Borrowings_Details
Borrowings (Details) (USD $) | 9 Months Ended | 3 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 26, 2014 | |
Borrowings and Credit Agreement | |||||||
Borrowings drawn | $37,300,000 | $37,500,000 | |||||
Letters of credit | |||||||
Borrowings and Credit Agreement | |||||||
Amount outstanding | 0 | 0 | 0 | ||||
2014 Credit Agreement [Member] | |||||||
Borrowings and Credit Agreement | |||||||
Available borrowing capacity | 62,700,000 | 62,700,000 | |||||
Debt issuance costs | 900,000 | ||||||
Deferred charge remaining | 300,000 | 300,000 | |||||
Amount outstanding | 36,300,000 | ||||||
Interest rate (as a percent) | 2.69% | 2.69% | 2.88% | ||||
Interest expense | 1,100,000 | 1,800,000 | 400,000 | 500,000 | |||
2014 Credit Agreement [Member] | Federal funds rate | |||||||
Borrowings and Credit Agreement | |||||||
Interest rate added to base rate (as a percent) | 0.50% | ||||||
2014 Credit Agreement [Member] | Eurocurrency rate for a one month interest period | |||||||
Borrowings and Credit Agreement | |||||||
Interest rate added to base rate (as a percent) | 1.00% | ||||||
2014 Credit Agreement [Member] | Minimum | |||||||
Borrowings and Credit Agreement | |||||||
Letter of credit fee (as a percent) | 2.25% | ||||||
2014 Credit Agreement [Member] | Minimum | Eurodollar rate | |||||||
Borrowings and Credit Agreement | |||||||
Interest rate added to base rate (as a percent) | 2.25% | ||||||
2014 Credit Agreement [Member] | Minimum | Eurocurrency rate for a one month interest period | |||||||
Borrowings and Credit Agreement | |||||||
Interest rate added to variable rate (as a percent) | 1.25% | ||||||
2014 Credit Agreement [Member] | Maximum | |||||||
Borrowings and Credit Agreement | |||||||
Letter of credit fee (as a percent) | 2.75% | ||||||
2014 Credit Agreement [Member] | Maximum | Eurodollar rate | |||||||
Borrowings and Credit Agreement | |||||||
Interest rate added to base rate (as a percent) | 2.75% | ||||||
2014 Credit Agreement [Member] | Maximum | Eurocurrency rate for a one month interest period | |||||||
Borrowings and Credit Agreement | |||||||
Interest rate added to variable rate (as a percent) | 1.75% | ||||||
Revolving credit facility | |||||||
Borrowings and Credit Agreement | |||||||
Borrowing capacity | 50,000,000 | ||||||
Available borrowing capacity | 50,000,000 | 50,000,000 | |||||
Amount outstanding | 0 | 0 | |||||
Revolving credit facility | Minimum | |||||||
Borrowings and Credit Agreement | |||||||
Commitment fee of unused balance (as a percent) | 0.25% | ||||||
Revolving credit facility | Maximum | |||||||
Borrowings and Credit Agreement | |||||||
Commitment fee of unused balance (as a percent) | 0.38% | ||||||
Notes payable to banks | |||||||
Borrowings and Credit Agreement | |||||||
Borrowing capacity | 50,000,000 | ||||||
Borrowings drawn | 37,300,000 | ||||||
Available borrowing capacity | 12,700,000 | 12,700,000 | 12,700,000 | ||||
Commitment fee of unused balance (as a percent) | 0.38% | ||||||
Amount outstanding | 31,700,000 | 31,700,000 | |||||
Number of installments for debt instrument periodic payment | 13 | ||||||
Amount of periodic payment of debt | $1,900,000 |
Borrowings_Details_2
Borrowings (Details 2) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |||
Calculation of the current and non-current portion of the Credit Agreement | |||
Current portion of Credit Agreement | $7,460 | $9,325 | $12,500 |
Credit Agreement, net of current portion | 24,245 | 23,750 | |
Total Credit Agreement | $31,705 | $36,250 |
Borrowings_Details_3
Borrowings (Details 3) (USD $) | Dec. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Future minimum Credit Agreement obligations | ||
Fiscal year 2015 | $1,865 | |
Fiscal year 2016 | 7,460 | |
Fiscal year 2017 | 7,460 | |
Fiscal year 2018 | 7,460 | |
Fiscal year 2019 | 7,460 | |
Total Credit Agreement | $31,705 | $36,250 |
Commitments_and_contingencies_
Commitments and contingencies (Details) (Purchase Commitment, USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Indemnities and commitments | |
Future obligations | $3.80 |
Revolving supply commitments (in days) | 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 | 9 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based compensation | ||||
Share-based compensation expense | $3,282,000 | $4,487,000 | $11,515,000 | $13,605,000 |
Cost of revenue | ||||
Share-based compensation | ||||
Share-based compensation expense | 317,000 | 181,000 | 932,000 | 722,000 |
Research and development | ||||
Share-based compensation | ||||
Share-based compensation expense | 797,000 | 632,000 | 2,473,000 | 2,107,000 |
Selling and marketing | ||||
Share-based compensation | ||||
Share-based compensation expense | 599,000 | 1,608,000 | 2,228,000 | 4,189,000 |
General and administrative | ||||
Share-based compensation | ||||
Share-based compensation expense | $1,569,000 | $2,066,000 | $5,882,000 | $6,587,000 |
Sharebased_compensation_Detail1
Share-based compensation (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Share data in Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based compensation | ||||
Share-based compensation expense (in dollars) | $3,282,000 | $4,487,000 | $11,515,000 | $13,605,000 |
Employee Stock Option | ||||
Share-based compensation | ||||
Vesting period (in years) | 4 years | |||
Percentage of shares that vest after one year from the date of grant | 25.00% | |||
Period from grant date after which awards begin to vest (in years) | 1 year | |||
Term of options (in years) | 10 years | |||
Granted (in shares) | 0.6 | |||
Weighted average grant date fair value (in dollars per share) | $5.90 | |||
Stock Options and Employee Stock | ||||
Share-based compensation | ||||
Share-based compensation expense (in dollars) | 1,800,000 | 3,200,000 | 6,300,000 | 10,300,000 |
Performance Stock Options | ||||
Share-based compensation | ||||
Share-based compensation expense (in dollars) | 200,000 | 100,000 | 300,000 | 500,000 |
Performance period (in years) | 3 years | |||
Performance Stock Options | Minimum | Chief Executive Officer | ||||
Share-based compensation | ||||
Performance period (in years) | 3 years | |||
Performance Stock Options | Maximum | Chief Executive Officer | ||||
Share-based compensation | ||||
Performance period (in years) | 5 years | |||
Performance Stock Units PSUs | ||||
Share-based compensation | ||||
Share-based compensation expense (in dollars) | 0 | 0 | 1,014,572 | 0 |
Performance period (in years) | 2 years | |||
Performance Stock Units PSUs | Minimum | ||||
Share-based compensation | ||||
Percentage of options earned depending on outcome of performance goals | 0.00% | |||
Performance Stock Units PSUs | Maximum | ||||
Share-based compensation | ||||
Percentage of options earned depending on outcome of performance goals | 200.00% | |||
Restricted Stock Units (RSUs) | ||||
Share-based compensation | ||||
Granted (in shares) | 1.2 | |||
Weighted average grant date fair value (in dollars per share) | $11.17 | |||
Share-based compensation expense (in dollars) | $1,500,000 | $900,000 | $4,100,000 | $2,200,000 |
Restricted Stock Units (RSUs) | Minimum | ||||
Share-based compensation | ||||
Vesting period (in years) | 1 year | |||
Restricted Stock Units (RSUs) | Maximum | ||||
Share-based compensation | ||||
Vesting period (in years) | 3 years |
Income_taxes_Details
Income taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | |||||||
Income tax expense | $1,154 | $1,676 | $2,287 | $1,614 | $3,963 | $5,117 | $4,881 |
Equity_Details
Equity (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | $166,426 | $162,737 | $150,834 | $150,834 | $150,834 | ||
Share-based compensation | 11,515 | ||||||
Exercise of stock options | 2,782 | ||||||
Purchase and distribution of stock under employee stock purchase plan | 291 | ||||||
Repurchase of statutory withholdings of stock issued for restricted stock units | -990 | ||||||
Other comprehensive income, net of tax | 1,339 | 71 | 1,810 | 276 | |||
Net loss | -11,290 | -751 | 5,929 | -155 | 5,178 | -6,112 | -6,355 |
Total comprehensive income | -9,951 | -84 | -4,302 | -6,079 | |||
Balance at end of period | 160,130 | 166,426 | 162,737 | 166,426 | 160,130 | ||
Parent | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 151,412 | 151,412 | 151,412 | ||||
Share-based compensation | 11,515 | ||||||
Exercise of stock options | 2,782 | ||||||
Purchase and distribution of stock under employee stock purchase plan | 291 | ||||||
Repurchase of statutory withholdings of stock issued for restricted stock units | -990 | ||||||
Other comprehensive income, net of tax | 1,810 | ||||||
Net loss | -6,112 | ||||||
Total comprehensive income | -4,302 | ||||||
Balance at end of period | 160,708 | 160,708 | |||||
Noncontrolling Interest | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | -578 | -578 | -578 | ||||
Share-based compensation | 0 | ||||||
Exercise of stock options | 0 | ||||||
Purchase and distribution of stock under employee stock purchase plan | 0 | ||||||
Repurchase of statutory withholdings of stock issued for restricted stock units | 0 | ||||||
Other comprehensive income, net of tax | 0 | ||||||
Net loss | 0 | ||||||
Total comprehensive income | 0 | ||||||
Balance at end of period | ($578) | ($578) |