LOS ANGELES--(BUSINESS WIRE)--RealD Inc. (NYSE: RLD), a leading global licensor of 3D technologies, today announced financial results for its third quarter of fiscal 2013 ended December 31, 2012.
“2D films generated an outsized share of global box office receipts during our third fiscal quarter, which limited our financial results for the quarter,” said Michael V. Lewis, Chairman and Chief Executive Officer of RealD. “Importantly, our continuing focus on growth initiatives in international markets recently led to two major exhibitor contracts in Russia, one of the highest grossing countries for 3D box office receipts. We announced today that Russian exhibitors Karo Film and Kinomax will equip up to a combined 300 RealD systems across their circuits, providing the industry’s brightest 3D presentation to their moviegoing customers.
“Our repurchase of 2.3 million shares of common stock during the quarter and the recent expansion of our stock repurchase program underscore our confidence in RealD’s future growth opportunities,” Lewis added.
Third Quarter Fiscal 2013 Financial Highlights
Financial results for the third quarter of fiscal 2013 benefited from RealD’s previously announced change in quarterly reporting periods, which added 10 extra days to the quarter ended December 31, 2012 when compared to the third quarter of fiscal 2012 ended December 23, 2011.
- Total revenue was $46.9 million, comprised of license revenue of $30.3 million and product and other revenue of $16.6 million. For the third quarter of fiscal 2012, total revenue was $49.0 million, comprised of license revenue of $28.5 million and product and other revenue of $20.6 million.
- GAAP net loss attributable to common stockholders was $4.2 million, or $0.08 per share, compared to GAAP net income attributable to common stockholders of $2.8 million, or $0.05 per diluted share, for the third quarter of fiscal 2012. The third quarter of fiscal 2012 included a tax benefit of $2.2 million.
- Adjusted EBITDA was $12.5 million, compared to $16.2 million in the third quarter of fiscal 2012.
- Adjusted EBITDA is defined within the section of this press release entitled “Use of Non-GAAP Financial Measures,” which includes a reconciliation to its most comparable GAAP measure, net income (loss).
Nine-Month Fiscal 2013 Financial Highlights
- Total revenue was $170.1 million, comprised of license revenue of $106.5 million and product and other revenue of $63.6 million. For the nine months ended December 23, 2011, total revenue was $196.6 million, comprised of license revenue of $116.1 million and product and other revenue of $80.4 million.
- GAAP net loss attributable to common stockholders was $5.4 million, or $0.10 per share, compared to GAAP net income of $31.3 million, or $0.55 per diluted share, for the nine months ended December 23, 2011.
- Adjusted EBITDA was $49.4 million, compared to $86.6 million for the nine months ended December 23, 2011.
Cash Flows, Stock Repurchases and Balance Sheet Highlights
- For the nine months ended December 31, 2012, cash flows from operating activities were $63.0 million and total capital expenditures were $24.4 million, resulting in free cash flow of $38.5 million.
- Free cash flow is defined within the section of this press release entitled “Use of Non-GAAP Financial Measures,” which includes a reconciliation to its most comparable GAAP measure, net cash provided by operating activities.
- During the quarter, the Company repurchased approximately 2,262,000 shares of common stock for $21.5 million, representing an average cost of $9.52 per share.
- Since the inception of the stock repurchase program in April 2012 through December 31, 2012, the Company has repurchased approximately 4,822,000 shares of common stock. As of December 31, 2012, $27.2 million remained available under the $75 million stock repurchase authorization.
- Cash and cash equivalents were $27.7 million and total debt was $35.0 million as of December 31, 2012. The increase of $22.5 million in total debt from September 21, 2012 primarily funded stock repurchases during the quarter.
Key Metrics
- Estimated box office generated on RealD-enabled screens(1) for the third quarter of fiscal 2013 was $643 million ($299 million domestic, $344 million international). In the third quarter of fiscal 2012, estimated box office generated on RealD-enabled screens was $532 million ($256 million domestic, $276 million international).
- The percentage of RealD box office generated from animation and family genre films (which have lower average ticket prices) decreased compared to the third quarter of fiscal 2012, when animation and family films dominated the holiday film slate.
- Nine 3D films were released in the third quarter of fiscal 2013 compared to eight 3D films in the third quarter of fiscal 2012.
- International markets generated 59% of license revenue and 34% of product and other revenue in the third quarter of fiscal 2013.
- As of December 31, 2012, the Company had deployed approximately 22,200 RealD-enabled screens, an increase of 13% from approximately 19,700 screens as of December 23, 2011, and an increase of 700 screens (300 domestic, 400 international), or 3%, from approximately 21,500 screens as of September 21, 2012.
- As of December 31, 2012, the Company had approximately 12,600 domestic screens at approximately 2,800 domestic theater locations and approximately 9,600 international screens at approximately 2,700 international theater locations.
| (1) | Estimated domestic box office on RealD-enabled screens represents the estimated 3D box office generated on RealD-enabled domestic screens. Estimated international box office on RealD-enabled international screens is the estimated 3D box office generated on RealD-enabled international screens. RealD’s estimates of box office on RealD-enabled screens rely on box office tracking data. International box office reflects RealD’s estimates of international box office generated on RealD-enabled screens in 20 foreign countries where box office tracking is available. RealD estimates these countries represent approximately 85% of RealD’s international license revenues. | |||||||
Planned Changes to Definition of Adjusted EBITDA, a Non-GAAP Measure
Beginning in the first quarter of fiscal 2014 that ends on June 30, 2013, RealD intends to modify its definition of Adjusted EBITDA for financial reporting purposes to align with the Adjusted EBITDA definition under the expanded credit facility entered into on April 19, 2012. The Adjusted EBITDA definition under RealD’s credit facility does not add back sales and use tax and property tax as part of the calculation. Beginning in fiscal 2014, RealD will no longer add back sales and use tax and property tax to calculate Adjusted EBITDA for financial reporting purposes.
3D Theatrical Release Schedule for Fourth Quarter of Fiscal 2013 and
First Three Quarters of Fiscal 2014
(As of February 6, 2013
– Domestic)
|
Fiscal Q4 2013 |
Film |
Domestic Release Date |
||||||||||
| (ending 3/31/13) | The Texas Chainsaw Massacre 3D | 1/4/2013 | ||||||||||
| Hansel and Gretel: Witch Hunters | 1/25/2013 | |||||||||||
| Escape from Planet Earth | 2/14/2013 | |||||||||||
| Jack the Giant Slayer | 3/1/2013 | |||||||||||
| Oz: The Great and Powerful | 3/8/2013 | |||||||||||
| The Croods | 3/22/2013 | |||||||||||
| GI Joe: Retaliation | 3/28/2013 | |||||||||||
|
Fiscal Q1 2014 |
Film |
Domestic Release Date |
||||||||||
| (ending 6/30/13) | Jurassic Park (re-release) | 4/5/2013 | ||||||||||
| Iron Man 3 | 5/3/2013 | |||||||||||
| The Great Gatsby | 5/10/2013 | |||||||||||
| Star Trek into Darkness | 5/17/2013 | |||||||||||
| EPIC | 5/24/2013 | |||||||||||
| Man of Steel | 6/14/2013 | |||||||||||
| World War Z | 6/21/2013 | |||||||||||
| Monsters University | 6/21/2013 | |||||||||||
|
Fiscal Q2 2014 |
Film |
Domestic Release Date |
||||||||||
| (ending 9/30/13) | Despicable Me 2 | 7/3/2013 | ||||||||||
| Pacific Rim | 7/12/2013 | |||||||||||
| Turbo | 7/19/2013 | |||||||||||
| The Wolverine | 7/26/2013 | |||||||||||
| The Smurfs 2 | 7/31/2013 | |||||||||||
| 300: Rise of an Empire | 8/2/2013 | |||||||||||
| Metallica: Through the Never | 8/9/2013 | |||||||||||
| Percy Jackson: Sea of Monsters | 8/16/2013 | |||||||||||
| One Direction Concert Movie | 8/30/2013 | |||||||||||
| Battle of the Year: The Dream Team | 9/13/2013 | |||||||||||
|
Cloudy With a Chance of Meatballs 2 |
9/27/2013 | |||||||||||
|
Fiscal Q3 2014 |
Film |
Domestic Release Date |
||||||||||
| (ending 12/31/13) | Sin City: A Dame to Die For | 10/4/2013 | ||||||||||
| Gravity | 10/4/2013 | |||||||||||
| The Seventh Son | 10/18/2013 | |||||||||||
| Thor: The Dark World | 11/8/2013 | |||||||||||
| Frozen | 11/27/2013 | |||||||||||
|
Postman Pat: The Movie--You Know You Are The One |
11/27/2013 | |||||||||||
| The Hobbit 2: The Desolation of Smaug | 12/13/2013 | |||||||||||
| Walking With Dinosaurs | 12/20/2013 | |||||||||||
| 47 Ronin | 12/25/2013 | |||||||||||
Sources: Rentrak and imdb.com.
Conference Call Information
Members of RealD management will host a conference call to discuss the Company’s financial results for the third quarter of fiscal 2013, beginning at 4:30 pm ET (1:30 pm PT), today, February 6, 2013. To access the call via telephone, interested parties should dial 877-407-0789 (U.S.) or 201-689-8562. (International) ten minutes prior to the start time and use conference ID 408060.
The conference call will also be broadcast live over the Internet, hosted at the Investor Relations section of the Company’s website at www.reald.com. An archived replay of the call will be available via webcast at www.reald.com or by dialing 877-870-5176 or 858-384-5517 for international callers. The conference ID for the telephone replay is 408060.
Cautionary Note on Forward-Looking Statements
This press release includes forward-looking information and statements, including but not limited to: statements concerning anticipated future financial and operating performance; RealD’s ability to continue to derive substantial revenue from the licensing of RealD’s 3D technologies for use in the motion picture industry, as well as RealD’s relationships with consumer electronics manufacturers and its ability to generate substantial revenue from the licensing of RealD’s 3D technologies for use in the 3D consumer electronics market; 3D motion picture releases and conversions scheduled for the fourth quarter of fiscal 2013 ending March 31, 2013 and the first, second and third quarters of fiscal 2014 ending March 31, 2014, their commercial success and consumer preferences; our ability to increase the number of RealD-enabled screens in domestic and international markets and market share; our ability to supply our solutions to our customers on a timely basis; RealD's relationships with its exhibitor and studio partners and the business model for 3D eyewear in North America; the progress, timing and amount of expenses associated with RealD’s research and development activities; market and industry trends, including growth in 3D content; RealD’s projected operating results; and competitive pressures in domestic and international markets. These statements are based on our management’s current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside management’s control that could cause actual results to differ materially from the results discussed in the forward-looking statements. The Company’s Annual Report on Form 10-K for the twelve months ended March 23, 2012, the Company’s Quarterly Report on Form 10-Q for the second fiscal quarter ended September 21, 2012 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.
RealD undertakes no obligation to update publicly the information contained in this press release, 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.
Use of Non-GAAP Financial Measures
To supplement RealD’s financial statements presented on a GAAP basis, RealD provides Adjusted EBITDA and free cash flow as supplemental measures 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 RealD management to be indicative of the company’s core operating performance. The Company defines free cash flow as net cash provided by operating activities less total capital expenditures in a given period (e.g., purchases of cinema systems and property and equipment on a combined basis).
RealD presents Adjusted EBITDA in reporting its financial results to provide investors with additional tools to evaluate RealD’s operating results in a manner that focuses on what RealD’s management believes to be its ongoing business operations. RealD presents free cash flow to provide investors a metric for our capacity to generate cash from our operating and investing activities to sustain our operating activities. RealD’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 and free cash flow are 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; and in communications with its Board of Directors concerning financial performance. Because not all companies use identical calculations, the Company’s presentation of Adjusted EBITDA and free cash flow may not be comparable to similarly titled measures of other companies. 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. Adjusted EBITDA also differs from the amounts calculated under the similarly titled definition in our credit agreement, which is further adjusted to reflect certain other cash and non-cash charges and is used to determine compliance with financial covenants and the Company’s ability to engage in certain activities, such as incurring additional debt and making certain restricted payments.
About RealD Inc.
RealD is a leading global licensor of 3D technologies. RealD’s extensive intellectual property portfolio is used in applications that enable a premium 3D viewing experience in the theater, the home and elsewhere. RealD licenses its RealD Cinema Systems to motion picture exhibitors that show 3D motion pictures and alternative 3D content. RealD also provides its RealD Display, active and passive eyewear, and RealD Format technologies to consumer electronics manufacturers and content producers and distributors to enable the delivery and viewing of 3D content. RealD’s cutting-edge technologies have been used for applications such as piloting the Mars Rover.
RealD was founded in 2003 and has offices in Beverly Hills, California; Boulder, Colorado; London, United Kingdom; Shanghai, China; Hong Kong; Tokyo, Japan; and Moscow, Russia. For more information, please visit our website at www.reald.com.
© 2013 RealD Inc. All Rights Reserved.
|
RealD Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) |
||||||||||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||||||
| December 31, | December 23, | December 31, | December 23, | |||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||
| License | $ | 30,334 | $ | 28,454 | $ | 106,499 | $ | 116,146 | ||||||||||||||||
| Product and other | 16,605 | 20,572 | 63,604 | 80,435 | ||||||||||||||||||||
| Total revenue | 46,939 | 49,026 | 170,103 | 196,581 | ||||||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||||||
| License | 10,523 | 9,202 | 34,819 | 30,321 | ||||||||||||||||||||
| Product and other | 15,497 | 15,870 | 65,366 | 64,465 | ||||||||||||||||||||
| Total cost of revenue | 26,020 | 25,072 | 100,185 | 94,786 | ||||||||||||||||||||
| Gross profit | 20,919 | 23,954 | 69,918 | 101,795 | ||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Research and development | 5,376 | 4,336 | 14,866 | 12,736 | ||||||||||||||||||||
| Selling and marketing | 6,053 | 6,564 | 18,872 | 20,259 | ||||||||||||||||||||
| General and administrative | 12,346 | 11,513 | 35,797 | 29,735 | ||||||||||||||||||||
| Total operating expenses | 23,775 | 22,413 | 69,535 | 62,730 | ||||||||||||||||||||
| Operating income (loss) | (2,856 | ) | 1,541 | 383 | 39,065 | |||||||||||||||||||
| Interest expense, net | (426 | ) | (227 | ) | (1,027 | ) | (710 | ) | ||||||||||||||||
| Other income (loss) | (183 | ) | (792 | ) | (557 | ) | 157 | |||||||||||||||||
| Income (loss) before income taxes | (3,465 | ) | 522 | (1,201 | ) | 38,512 | ||||||||||||||||||
| Income tax expense (benefit) | 694 | (2,241 | ) | 4,242 | 7,170 | |||||||||||||||||||
| Net income (loss) | (4,159 | ) | 2,763 | (5,443 | ) | 31,342 | ||||||||||||||||||
|
Net (income) loss attributable to noncontrolling interest |
(1 | ) | 70 | 89 | (9 | ) | ||||||||||||||||||
|
Net income (loss) attributable to RealD Inc. common stockholders |
$ | (4,160 | ) | $ | 2,833 | $ | (5,354 | ) | $ | 31,333 | ||||||||||||||
| Earnings (loss) per common share: | ||||||||||||||||||||||||
| Basic | $ | (0.08 | ) | $ | 0.05 | $ | (0.10 | ) | $ | 0.58 | ||||||||||||||
| Diluted | $ | (0.08 | ) | $ | 0.05 | $ | (0.10 | ) | $ | 0.55 | ||||||||||||||
| Shares used in computing earnings (loss) per common share: | ||||||||||||||||||||||||
| Basic | 51,062 | 54,524 | 53,157 | 54,274 | ||||||||||||||||||||
| Diluted | 51,062 | 56,385 | 53,157 | 56,985 | ||||||||||||||||||||
|
RealD Inc. Consolidated Balance Sheets (In thousands) |
|||||||||||||||||||
| December 31, | March 23, | ||||||||||||||||||
| 2012 | 2012 | ||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Assets | |||||||||||||||||||
| Current assets: | |||||||||||||||||||
| Cash and cash equivalents | $ | 27,667 | $ | 24,894 | |||||||||||||||
| Accounts receivable, net | 50,375 | 59,212 | |||||||||||||||||
| Inventories | 14,105 | 40,577 | |||||||||||||||||
| Deferred costs – eyewear | 351 | 932 | |||||||||||||||||
| Prepaid expenses and other current assets | 5,392 | 2,630 | |||||||||||||||||
| Total current assets | 97,890 | 128,245 | |||||||||||||||||
| Property and equipment, net | 21,183 | 12,713 | |||||||||||||||||
| Cinema systems, net | 129,954 | 141,024 | |||||||||||||||||
| Digital projectors, net-held for sale | 971 | 1,078 | |||||||||||||||||
| Goodwill | 10,657 | 10,657 | |||||||||||||||||
| Other intangibles, net | 1,620 | 1,746 | |||||||||||||||||
| Deferred income taxes | 3,049 | 3,049 | |||||||||||||||||
| Other assets | 5,101 | 3,663 | |||||||||||||||||
| Total assets | $ | 270,425 | $ | 302,175 | |||||||||||||||
| Liabilities and equity | |||||||||||||||||||
| Current liabilities: | |||||||||||||||||||
| Accounts payable | $ | 17,046 | $ | 22,617 | |||||||||||||||
| Accrued expenses and other liabilities | 30,570 | 28,870 | |||||||||||||||||
| Deferred revenue | 9,218 | 7,201 | |||||||||||||||||
| Income taxes payable | 945 | 1,121 | |||||||||||||||||
| Deferred income taxes | 3,100 | 3,149 | |||||||||||||||||
| Total current liabilities | 60,879 | 62,958 | |||||||||||||||||
| Credit facility agreement | 35,000 | 25,000 | |||||||||||||||||
| Deferred revenue, net of current portion | 11,038 | 13,920 | |||||||||||||||||
| Other long-term liabilities, customer deposits and virtual print fee liability | 4,458 | 2,691 | |||||||||||||||||
| Commitments and contingencies | |||||||||||||||||||
| Equity (deficit) | |||||||||||||||||||
| Common stock | 325,540 | 309,894 | |||||||||||||||||
| Accumulated deficit | (165,824 | ) | (112,711 | ) | |||||||||||||||
| Total RealD Inc. stockholders’ equity | 159,716 | 197,183 | |||||||||||||||||
| Noncontrolling interest | (666 | ) | 423 | ||||||||||||||||
| Total equity | 159,050 | 197,606 | |||||||||||||||||
| Total liabilities and equity | $ | 270,425 | $ | 302,175 | |||||||||||||||
|
RealD Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) |
|||||||||||||||||||
| Nine months ended | |||||||||||||||||||
| December 31, | December 23, | ||||||||||||||||||
| 2012 | 2011 | ||||||||||||||||||
| Cash flows from operating activities | |||||||||||||||||||
| Net income (loss) | $ | (5,443 | ) | $ | 31,342 | ||||||||||||||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|||||||||||||||||||
| Depreciation and amortization |
24,130 |
20,558 | |||||||||||||||||
| Deferred income tax | (49 | ) | (179 | ) | |||||||||||||||
| Non-cash interest expense | 342 | 133 | |||||||||||||||||
| Non-cash stock compensation | 13,965 | 11,718 | |||||||||||||||||
| Gain on sale of digital projectors | – | (1,156 | ) | ||||||||||||||||
| Loss on disposal of property and equipment | 44 | 434 | |||||||||||||||||
| Impairment of long-lived assets and related purchase commitments | 6,581 | 9,024 | |||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||
| Accounts receivable | 6,361 | 6,661 | |||||||||||||||||
| Inventories | 26,465 | 8,951 | |||||||||||||||||
| Prepaid expenses and other current assets | (2,372 | ) | (306 | ) | |||||||||||||||
| Deferred costs - eyewear | 581 | (524 | ) | ||||||||||||||||
| Other assets | (661 | ) | (3,458 | ) | |||||||||||||||
| Accounts payable |
(5,595 |
) | (32,904 | ) | |||||||||||||||
| Accrued expenses and other liabilities | (2,092 | ) | (12,794 | ) | |||||||||||||||
| Other long-term liabilities, customer deposits and virtual print fee liability | 1,767 | 1,700 | |||||||||||||||||
| Income taxes receivable/payable | (176 | ) | 4,024 | ||||||||||||||||
| Deferred revenue | (865 | ) | (6,269 | ) | |||||||||||||||
| Net cash provided by operating activities | 62,983 | 36,955 | |||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||||
| Purchases of property and equipment | (11,665 | ) | (5,545 | ) | |||||||||||||||
| Purchases of cinema systems and related components | (12,774 | ) | (46,656 | ) | |||||||||||||||
| Proceeds from sale of digital projectors | 2,474 | 3,999 | |||||||||||||||||
| Net cash used in investing activities | (21,965 | ) | (48,202 | ) | |||||||||||||||
| Cash flows from financing activities | |||||||||||||||||||
| Repayments of long-term debt | – | (2,311 | ) | ||||||||||||||||
| Proceeds from credit facility | 47,500 | 30,000 | |||||||||||||||||
| Repayments on credit facility | (37,500 | ) | (5,000 | ) | |||||||||||||||
| Payments of debt issuance costs | (1,167 | ) | – | ||||||||||||||||
| Proceeds from exercise of stock options | 1,070 | 528 | |||||||||||||||||
| Proceeds from employee stock purchase plan | 611 | – | |||||||||||||||||
| Proceeds from exercise of warrants | – | 271 | |||||||||||||||||
| Proceeds from exercise of motion picture exhibitor options | – | 3 | |||||||||||||||||
| Purchases of treasury stock | (47,759 | ) | – | ||||||||||||||||
| Distributions to noncontrolling interests | (1,000 | ) | – | ||||||||||||||||
| Net cash (used) provided by financing activities | (38,245 | ) | 23,491 | ||||||||||||||||
| Net increase in cash and cash equivalents | 2,773 | 12,244 | |||||||||||||||||
| Cash and cash equivalents, beginning of period | 24,894 | 16,936 | |||||||||||||||||
| Cash and cash equivalents, end of period | $ | 27,667 | $ | 29,180 | |||||||||||||||
|
RealD Inc. Schedule of Non-GAAP Reconciliations (In thousands) (Unaudited)
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
||||||||||||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||||||||
| December 31, | December 23, | December 31, | December 23, | |||||||||||||||||||||||
| (in thousands) | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||
| Net income (loss) | $ | (4,159 | ) | $ | 2,763 | $ | (5,443 | ) | $ | 31,342 | ||||||||||||||||
| Add (deduct): | ||||||||||||||||||||||||||
| Interest expense, net | 426 | 227 | 1,027 | 710 | ||||||||||||||||||||||
| Income tax expense (benefit) | 694 | (2,241 | ) | 4,242 | 7,170 | |||||||||||||||||||||
| Depreciation and amortization | 8,194 | 7,406 | 24,130 | 20,558 | ||||||||||||||||||||||
|
Other (income) loss(1) |
183 | 792 | 557 | (157 | ) | |||||||||||||||||||||
|
Share-based compensation expense(2) |
4,871 | 4,086 | 13,965 | 11,718 | ||||||||||||||||||||||
|
Impairment of assets and intangibles(3) |
680 | 1,196 | 6,581 | 9,024 | ||||||||||||||||||||||
|
Sales and use tax(4) |
1,008 | 1,569 | 3,170 | 5,076 | ||||||||||||||||||||||
|
Property tax(5) |
580 | 367 | 1,191 | 1,133 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 12,477 | $ | 16,165 | $ | 49,420 | $ | 86,574 | ||||||||||||||||||
| (1) | Includes gains and losses from foreign currency exchange and foreign currency forward contracts. | |||||
| (2) | Represents share-based compensation expense of nonstatutory and incentive stock options and restricted stock units and employee stock purchase plan to employees, officers and directors. | |||||
| (3) | Represents impairment of long-lived assets, such as fixed assets, theatrical equipment and related purchase commitments and identifiable intangibles. | |||||
| (4) | Represents taxes incurred by us for cinema license and product revenue. | |||||
| (5) | Represents property taxes on RealD Cinema Systems and digital projectors. | |||||
|
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
|||||||||||||||||||
| Nine months ended | |||||||||||||||||||
| December 31, | December 23, | ||||||||||||||||||
| 2012 | 2011 | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Net cash provided by operating activities | $ | 62,983 | $ | 36,955 | |||||||||||||||
| Purchases of property and equipment | (11,665 | ) | (5,545 | ) | |||||||||||||||
| Purchases of cinema systems and related components | (12,774 | ) | (46,656 | ) | |||||||||||||||
| Free cash flow | $ | 38,544 | $ | (15,246 | ) | ||||||||||||||