8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (date of earliest event reported):  December 13, 2011

RealD Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-34818	77-0620426
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

100 N. Crescent Drive, Suite 120 Beverly Hills, CA	90210
(Address of principal executive offices)	(Zip Code)

(310) 385-4000

(Registrant’s telephone number, including area code)

NA

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01.Regulation FD Disclosure.

On December 13, 2011, RealD Inc. (the “Company”) inadvertently distributed non-public, unaudited, preliminary non-GAAP financial information that represented a preliminary discussion draft related to the results of its operations for the quarter-to-date and year-to-date period ended November 18, 2011 (the “Financial Information”).  The Financial Information, which was not reviewed by management or the external auditors, and was intended for management’s internal use only, was inadvertently distributed on December 13, 2011 after the close of the market.  A copy of the Financial Information is attached hereto as Exhibit 99.1.

This Current Report on Form 8-K is being furnished solely to satisfy the requirements of Regulation FD in light of the inadvertent disclosure.  The information under this Item 7.01 in this Current Report on Form 8-K will not be incorporated by reference into any registration statement or other document filed by the Company under the Securities Act of 1933, unless specifically identified therein as being incorporated by reference.

The furnishing of information under this Item 7.01 in this Current Report on Form 8-K is not intended to, and does not, constitute a determination or admission by the Company that the information is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.

The Company does not intend on disclosing similar preliminary financial information in the future, nor undertakes any obligation to publicly update the Financial Information except as required by law. The preliminary draft Financial Information does not include all of the information and footnotes required by GAAP for complete financial statement presentation. In addition, certain key accounts, reconciliations and analytics are performed on a quarterly basis and adjustments may be subsequently required.  Due to the preliminary and unadjusted nature of the draft Financial Information, it should not be relied upon by any person as necessarily accurate.

Also included in the inadvertently disclosed Financial Information was the Company’s historical budget for the quarter-to-date and year-to-date period ended November 18, 2011 prepared for senior management in anticipation of the current fiscal year, which began in March 2011, based on certain assumptions that were made and scenarios contemplated at the time it was prepared.  The Company has not previously published budget information of this nature and does not intend to publish such budget information at any time in the future.  The budget information was intended solely for the Company’s management’s internal use only and was not intended for public disclosure.  As a result, the Financial Information should not be relied upon in predicting the Company’s future financial performance and results of operations.

Cautionary Note on Forward-Looking Statements

This Current Report on Form 8-K includes 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.

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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.

Use of Non-GAAP Financial Measures

The Financial Information includes Adjusted EBITDA, which the Company’s management uses as a supplemental measure of its performance.  Adjusted EBITDA is not a recognized measurement under U.S. GAAP.  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.

Item 9.01.	Financial Statements and Exhibits.
(d)	Exhibits

Exhibit Number	Description
99.1	Copy of inadvertently disclosed Financial Information

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

RealD Inc.
By:	/s/ Craig Gatarz
	Craig Gatarz
	Executive Vice President, General Counsel and
	Secretary

Date:  December 14, 2011

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EX-99.1

Exhibit 99.1

Preliminary, Unaudited Draft of Inadvertently Disclosed Financial Information Subject to Adjustment

	Nov QTD FY12			Nov QTD FY12			Nov YTD FY12			Nov YTD FY12
($ 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		%
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
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:

	Nov QTD FY12			Nov QTD FY12			Nov YTD FY12			Nov YTD FY12
($ 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-

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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.

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