Attached files
| file | filename |
|---|---|
| 8-K - 8-K - RealD Inc. | a11-31742_18k.htm |
Exhibit 99.1
Preliminary, Unaudited Draft of Inadvertently Disclosed Financial Information Subject to Adjustment
|
|
|
Nov |
|
Nov |
|
Nov |
|
Nov |
| ||||
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($ in thousands) |
|
Actual |
|
Budget |
|
Actual |
|
Budget |
| ||||
|
Gross licensing revenue |
|
$ |
16,427 |
|
$ |
22,972 |
|
$ |
104,120 |
|
$ |
131,365 |
|
|
Exhibitor option expense |
|
0 |
|
0 |
|
0 |
|
0 |
| ||||
|
Net licensing revenue |
|
16,427 |
|
22,972 |
|
104,120 |
|
131,365 |
| ||||
|
Product and other revenue |
|
12,550 |
|
22,771 |
|
72,414 |
|
125,090 |
| ||||
|
Total net revenue |
|
28,977 |
|
45,743 |
|
176,534 |
|
256,455 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cost of revenue |
|
$ |
12,420 |
|
$ |
34,136 |
|
$ |
82,134 |
|
$ |
151,304 |
|
|
Gross profit |
|
$ |
16,557 |
|
$ |
11,607 |
|
$ |
94,400 |
|
$ |
105,151 |
|
|
Gross margin |
|
57 |
% |
25 |
% |
53 |
% |
41 |
% | ||||
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|
|
|
|
|
|
|
|
|
| ||||
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Research and development |
|
$ |
3,275 |
|
$ |
4,446 |
|
$ |
11,674 |
|
$ |
15,684 |
|
|
Selling and marketing |
|
4,590 |
|
5,348 |
|
18,285 |
|
20,952 |
| ||||
|
General and administrative (ex tax) |
|
5,880 |
|
6,702 |
|
19,829 |
|
27,155 |
| ||||
|
Sales, use and property taxes |
|
1,131 |
|
1,187 |
|
5,404 |
|
9,137 |
| ||||
|
Operating expenses |
|
$ |
14,876 |
|
$ |
17,683 |
|
$ |
55,192 |
|
$ |
72,928 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Operating income |
|
$ |
1,681 |
|
$ |
(6,076 |
) |
$ |
39,208 |
|
$ |
32,223 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income (loss) |
|
$ |
(1,050 |
) |
$ |
(6,822 |
) |
$ |
27,532 |
|
$ |
25,204 |
|
|
Net income (loss) to common |
|
$ |
(1,050 |
) |
$ |
(6,822 |
) |
$ |
27,453 |
|
$ |
25,204 |
|
|
Adjusted EBITDA(1) |
|
$ |
11,346 |
|
$ |
5,794 |
|
$ |
81,759 |
|
$ |
78,304 |
|
|
EBITDA margin |
|
39 |
% |
13 |
% |
46 |
% |
31 |
% | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
RealD installed screens |
|
19,100 |
|
19,800 |
|
19,100 |
|
19,800 |
| ||||
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3D films released |
|
5 |
|
6 |
|
25 |
|
24 |
| ||||
(1) Adjusted EBITDA is not a recognized measurement under U.S. GAAP and is used by the Company’s management as a supplemental measure of its performance. The Company defines Adjusted EBITDA as net income (loss), plus net interest expense, income and other taxes, and depreciation and amortization, as further adjusted to eliminate the impact of share based compensation expense, exhibitor option expense and certain other items not considered by the Company’s management to be indicative of the Company’s core operating performance. The Company presents Adjusted EBITDA in reporting its financial results to provide investors with additional tools to evaluate the Company’s operating results in a manner that focuses on what the Company’s management believes to be its ongoing business operations. The Company’s management does not itself, nor does it suggest that investors should, consider any such Non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Adjusted EBITDA is used by management for planning purposes,
including: the preparation of internal budgets, forecasts and strategic plans; in analyzing the effectiveness of business strategies; to evaluate potential acquisitions; in making compensation decisions; in communications with its Board of Directors concerning financial performance; and as part of the Company’s credit agreement in which Adjusted EBITDA is used to measure compliance with certain covenants. Because not all companies use identical calculations, the Company’s presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as tax and debt service payments.
Set forth below is a reconciliation of Adjusted EBITDA to net income for the periods:
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|
|
Nov |
|
Nov |
|
Nov |
|
Nov |
| ||||
|
($ in thousands) |
|
Actual |
|
Budget |
|
Actual |
|
Budget |
| ||||
|
Net income (loss) |
|
$ |
(1,050 |
) |
$ |
(6,822 |
) |
$ |
27,532 |
|
$ |
25,204 |
|
|
Add (deduct): |
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
138 |
|
265 |
|
621 |
|
813 |
| ||||
|
Income tax expense |
|
2,391 |
|
481 |
|
11,802 |
|
6,206 |
| ||||
|
Depreciation and amortization |
|
4,817 |
|
6,377 |
|
17,969 |
|
23,290 |
| ||||
|
Other (income) loss(1) |
|
202 |
|
— |
|
(747 |
) |
— |
| ||||
|
Share-based compensation expense(2) |
|
3,586 |
|
3,586 |
|
11,219 |
|
12,064 |
| ||||
|
Exhibitor option expense(3) |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Impairment of assets and intangibles(4) |
|
131 |
|
720 |
|
7,959 |
|
1,590 |
| ||||
|
Sales and use tax(5) |
|
906 |
|
969 |
|
4,414 |
|
7,778 |
| ||||
|
Property tax(6) |
|
225 |
|
218 |
|
990 |
|
1,359 |
| ||||
|
Management fee(7) |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Adjusted EBITDA |
|
$ |
11,346 |
|
$ |
5,794 |
|
$ |
81,759 |
|
$ |
78,304 |
|
(1) Includes amortization of debt issue costs, unrealized foreign currency exchange gains and losses and gain from the sale of digital projectors in the year ending March 31, 2012.
(2) Represents share-based compensation expense of nonstatutory and incentive stock options to employees, officers, directors and consultants.
(3) Represents stock options granted to some of our motion picture exhibitor licensees. The amounts are recorded as contra revenue in the condensed consolidated financial statements.
(4) Represents impairment of long-lived assets, such as fixed assets, theatrical equipment and identifiable intangibles.
(5) Represents taxes incurred by us for cinema license and product revenue.
(6) Represents property taxes on RealD Cinema Systems and digital projectors.
(7) Represents payment of management fees to our Series C mandatorily redeemable convertible preferred stockholder (included in general and administrative expense, which was terminated upon the completion of our initial public offering).
Cautionary Note on Forward-Looking Statements
This release contains forward-looking information and statements, including but not limited to statements concerning anticipated and budgeted financial performance and financial reporting practices. These statements are based on our management’s current expectations and beliefs, as well as a number of assumptions concerning forward-looking statements and are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our management’s control, that could cause actual results to differ materially from the results discussed in the forward-
looking statements. The Company’s Quarterly Report on Form 10-Q for the three months ended September 23, 2011 and other documents filed with the SEC include a more detailed discussion of the risks and uncertainties that may cause actual results to differ materially from the results discussed in the forward-looking statements. The Company undertakes no obligation to update publicly the information contained in this Current Report on Form 8-K, or any forward-looking statements, to reflect new information, events or circumstances after the date they were made, or to reflect the occurrence of unanticipated events.