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Note 5 - Digital Link II Joint Venture
3 Months Ended
Mar. 31, 2013
Equity Method Investments and Joint Ventures Disclosure [Text Block]
5.  Digital Link II Joint Venture

On March 6, 2007, the Company entered into an agreement with RealD to form an operating entity Digital Link II, LLC (the “LLC”). Under the agreement, the LLC was formed with the Company and RealD as the only two members with membership interests of 44.4% and 55.6%, respectively. The LLC was formed for purposes of commercializing certain 3D technology and to fund the deployment of digital projector systems and servers to exhibitors.

The Company accounts for its investment by the equity method. Under this method, the Company recorded its proportionate share of LLC net income or loss based on the LLC’s financial statements as of March 23, 2013 and March 25, 2012, respectively.  The LLC uses four 13-week periods for a total of 52 weeks to align its fiscal year-end with that of its majority interest holder, RealD.  The Company’s portion of loss of the LLC was approximately $0.1 million for the quarter ended March, 31, 2013.  The Company’s portion of income of the LLC was approximately $.09 million for the quarter ended March 31, 2012.

In the past, the Company sold digital theatre projection equipment, in the normal course of business, to the LLC.  The LLC in turn provides and sells the digital projection equipment to third party customers under system use agreements or through sales agreements. Revenue recognized by the Company on the sale transaction to the LLC is limited by its 44.4% ownership in the joint venture which will be recognized upon sale of the equipment to the third parties. There were no sales to the LLC during the quarters ended March 31, 2013 and 2012.  However, the Company recognized $0.2 million of gross margin during the quarter ended March, 31, 2012 related to the LLC’s sale of equipment to third parties.  The total receivable balance due from the LLC was insignificant at March 31, 2013 and December 31, 2012.

During the first quarter of 2012 the Company received a $1.5 million return of investment in the LLC.  The Company received no distributions from the LLC in the first quarter of 2013.