Form 8-K RealD Inc. For: Nov 03

Item�2.02.�������������� Results of Operations and Financial Condition

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On November�3, 2014, RealD Inc. (the �Company�) issued a press release reporting its financial results for the second quarter of fiscal year 2015.� The press release is attached to this Current Report on Form�8-K as Exhibit�99.1.

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The information contained in this report and the attached press release is �furnished� but not �filed� for purposes of Section�18 of the Securities Exchange Act of 1934, as amended.

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On November�3, 2014, the Company will conduct a properly noticed conference call to discuss its results of operations for the second quarter of fiscal year 2015 and to answer any questions raised by the call�s audience.

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Item�9.01.�������������� Financial Statements and Exhibits.

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(d)�����������������������Exhibits

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SIGNATURE

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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.

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Exhibit 99.1

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RealD Inc. Reports Second Quarter Fiscal Year 2015 Financial Results

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����������������������������������������� Licensing revenue of $31.8 million increased 3% year-over-year

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����������������������������������������� Adjusted EBITDA of $17.6 million increased 28% year-over-year

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����������������������������������������� Free cash flow more than doubled to $23.4 million for the three months ended September�30, 2014

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LOS ANGELES (November�3, 2014) - Global visual technology company RealD Inc. (NYSE: RLD) today announced financial results for its second quarter of fiscal 2015 ended September�30, 2014.

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�We are pleased with our fiscal second quarter results, which reflect modest growth in licensing revenues coupled with strong increases in Adjusted EBITDA and free cash flow,� commented Michael V. Lewis, Chairman and Chief Executive Officer of RealD.� �Our performance reflects broader box office improvement, continued stabilization in global 3D percentages and previously enacted cost cutting measures.� We are pleased with our efforts to support 3D viewership and continue to work with our studio and exhibitor partners to optimize 3D performance across our platform.�

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Mr.�Lewis continued, �Over the past year, we have evaluated all aspects of our business and are in the process of taking additional steps designed to enhance shareholder value.� As part of this effort, we are actively evaluating alternatives, in consultation with our outside advisors, for restructuring our R&D efforts: Consumer, Laser, Screen and RealD TrueImageTM. We expect the outcome of this process to result in a further streamlining of our organization and efficiencies in our cost structure.�

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RealD management and its Board of Directors believe the value of its business will benefit from the strength of its cinema platform and upcoming film slate, the value inherent in its IP portfolio, and the changes being made to further reduce operating expenses and capital expenditures.� The Company strongly believes that the aforementioned actions will enhance value for all RealD shareholders.� Accordingly, the RealD Board, in consultation with outside financial and legal advisors, has carefully reviewed the unsolicited indication of interest from Starboard Value LP and unanimously determined not to pursue it.

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Second Quarter Fiscal 2015 Financial Highlights

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������������������� Total revenue was $47.4 million, comprised of license revenue of $31.8 million and product and other revenue of $15.6 million. For the second quarter of fiscal 2014, total revenue was $43.9 million, comprised of license revenue of $31.0 million and product and other revenue of $12.9 million.

������������������� China license revenue represented 11% of total worldwide license revenue, up from 9% for the second fiscal quarter of 2014.

������������������� GAAP net loss attributable to common stockholders was $1.6 million, or $0.03 per share, compared to GAAP net loss attributable to common stockholders of $4.7 million, or $0.09 per diluted share, for the second quarter of fiscal 2014.

������������������� Adjusted EBITDA was $17.6 million, compared to $13.7 million for the second quarter of fiscal 2014.

������������������� 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).

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Six-Months Fiscal 2015 Financial Highlights

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������������������� Total revenue was $102.8 million, comprised of license revenue of $67.8 million and product and other revenue of $35.0 million. For the six months ended September�30, 2013, total revenue was $103.1 million, comprised of license revenue of $68.3 million and product and other revenue of $34.8 million.

������������������� China license revenue represented 13% of total worldwide license revenue, up from 8% for the six months ended September�30, 2013.

������������������� GAAP net income attributable to common stockholders was $3.9 million, or $0.08 per share, compared to GAAP net loss attributable to common stockholders of $6.2 million, or $0.13 per diluted share, for the six months ended September�30, 2013.

������������������� Adjusted EBITDA was $40.5 million, compared to $29.7 million for the six months ended September�30, 2013.

������������������� 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).

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Cash Flows and Balance Sheet Highlights

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������������������� For the six months ended September�30, 2014, cash inflow from operating activities was $32.9 million and total capital expenditures were $10.9 million, resulting in positive free cash flow of $22.0 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.

������������������� As of September�30, 2014, cash and cash equivalents were $49.9 million and total debt was $33.6 million.

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Key Metrics

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������������������� Estimated box office generated on RealD-enabled screens(1)�in the second quarter of fiscal 2015 was $618 million ($274 million domestic, $344 million international).� In the second quarter of fiscal 2014, estimated box office generated on RealD-enabled screens was $582 million ($253 million domestic, $329 million international).

������������������� Nine 3D films were released in the second quarter of fiscal 2015, compared to 11 3D films in the second quarter of fiscal 2014.� These figures reflect the number of 3D films released domestically during the periods.

������������������� International markets generated 67% of license revenue and 33% of product and other revenue in the second quarter of fiscal 2015.

������������������� As of September�30, 2014, RealD had deployed approximately 26,000 RealD-enabled screens, an increase of 7% from approximately 24,200 screens as of September�30, 2013, and an increase of 800 screens (100 domestic, 700 international), or 3%, from approximately 25,200 screens as of March�31, 2014.

������������������� As of September�30, 2014, RealD had approximately 13,500 domestic screens at approximately 3,000 domestic theater locations and approximately 12,500 international screens at approximately 3,060 international theater locations.

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(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 19 foreign countries where box office tracking is available. RealD estimates these countries represent approximately 85% of RealD�s international license revenues. The 19 foreign countries do not include China.

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3D Theatrical Release Schedule for the Last Two Quarters of Fiscal 2015 and First Two Quarters of Fiscal 2016

(As of November�3, 2014 � Domestic)

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�Sources: Rentrak and imdb.com.

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Conference Call Information

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Members of RealD�s management will host a conference call to discuss RealD�s financial results for the second quarter of fiscal 2015, beginning at 4:30 pm ET (1:30 pm PT), today, November�3, 2014. To access the call via telephone, interested parties should dial (855) 769-4820 (U.S.) or (407) 374-0083 (International) ten minutes prior to the start time and use conference ID 15798923.

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The conference call will also be broadcast live over the Internet, hosted at the Investor Relations section of RealD�s website at www.reald.com.� An archived replay of the call will be available via webcast at www.reald.com or by dialing (855) 859-2056, or (404) 537-3406 for international callers. The conference ID for the telephone replay is 15798923.

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Cautionary Note on Forward-Looking Statements

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This press release includes forward-looking information and statements, including but not limited to: statements concerning anticipated future financial and operating performance; our expectations regarding demand for and acceptance of our technologies and our ability to successfully commercialize our technologies within a particular timeframe, if at all; our ability to continue to derive substantial revenue from the licensing of our 3D technologies for use in the motion picture industry; 3D motion picture releases and conversions scheduled for fiscal 2015 ending March�31, 2015 and beyond, their commercial success and consumer preferences, that, in recent periods, have trended in favor of 2D over 3D in some motion pictures in domestic and international markets; our ability to increase our revenues and the number of RealD-enabled screens in domestic and international markets and our market share; our ability to supply our solutions to our customers on a timely basis; our relationships with our exhibitor and studio partners and the business model for 3D eyewear in North America; the process of evaluating alternatives regarding our research and development activities, including any anticipated changes in organization structure or the realization of further reductions in cost structure as a result; market and industry growth opportunities and trends in the market in which we operate, including growth in 3D content; our plans, strategies and expected opportunities; the deployment of and demand for our products and products incorporating our technologies; competitive pressures in domestic and international cinema markets impacting license and product revenues; and our ability to execute and achieve anticipated savings or other benefits from our cost reduction efforts.

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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 our management�s control that could cause actual results to differ materially from the results discussed in the forward-looking statements.� RealD�s Annual Report on Form�10-K for the twelve months ended March�31, 2014 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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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.

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Use of Non-GAAP Financial Measures

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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.� RealD defines Adjusted EBITDA as net income (loss) plus expenses for interest, income taxes, depreciation, amortization, impairment and stock-based compensation plus net foreign exchange loss (gain) plus expenses comprising the non-U.S. GAAP category �restructuring charges, severance costs and reserves� as defined in RealD�s Credit Agreement.� RealD 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).

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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, RealD�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.� Our definition of Adjusted EBITDA for financial reporting purposes aligns with the Adjusted EBITDA definition under our Credit Agreement.

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About RealD Inc.

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RealD is a leading global licensor of 3D and other visual technologies.� RealD�s extensive intellectual property portfolio is and can be used in applications that enable a premium viewing experience in the theater, the home and elsewhere.� RealD�s core business is the licensing of RealD Cinema Systems and the product sale of RealD eyewear to motion picture exhibitors to enable a premium viewing experience for 3D motion pictures and alternative 3D content in the theater.

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RealD was founded in 2003 and has offices in Beverly Hills, California; Boulder, Colorado; London, United Kingdom; Moscow, Russia; Shanghai, China; Hong Kong; Tokyo, Japan; and Rio de Janeiro, Brazil.� For more information, please visit our website at www.reald.com.

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� 2014 RealD Inc.� All Rights Reserved.

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Investor Contact:

Andrew Greenebaum / Laura Bainbridge

310-829-5400

[email protected]

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Media Contact:

Will Hammond

424-702-4758

[email protected]

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RealD Inc.

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Condensed Consolidated Statements of Operations (Unaudited)

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(In thousands, except per share data)

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RealD Inc.

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Condensed Consolidated Balance Sheets

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(In thousands)

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RealD Inc.

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Condensed Consolidated Statements of Cash Flows (Unaudited)

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(In thousands)

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RealD Inc.

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Schedule of Non-GAAP Reconciliations

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(In thousands)

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(Unaudited)

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Reconciliation of Adjusted EBITDA to Net Income (Loss)

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(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)�������� Expenses comprising the non-U.S. GAAP category �restructuring charges, severance costs and reserves� as defined in RealD�s Credit Agreement.

(5)�������� Aligns with the Adjusted EBITDA definition under RealD�s credit facility.

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Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

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