Rambus Inc.
Jul 24, 2008

Rambus Reports Second Quarter Earnings

Revenue of $35.7 Million; Loss of $1.38 Per Share Includes a
Deferred Tax Asset Valuation Allowance of $1.25 Loss Per Share

LOS ALTOS, Calif., Jul 24, 2008 (BUSINESS WIRE) -- Rambus Inc. (NASDAQ:RMBS), one of the world's premier technology licensing companies specializing in high-speed memory architectures, today reported financial results for the second quarter of 2008.

Revenues for the second quarter of 2008 were $35.7 million, down 10.1% sequentially from the first quarter and down 24.9% over the second quarter of last year. Revenues for the six months ended June 30, 2008 were $75.5 million, down 22.8% over the same period of last year.

"Despite the obvious headwinds faced in the quarter, we remain committed to a strategy that focuses on long-term success," said Harold Hughes, president and chief executive officer at Rambus. "We will continue to invest in technology development and fully fund our legal efforts. Nevertheless, we intend to reduce our current cost structure through actions which may include downsizing our workforce in order to maintain the financial strength of the company. In doing so, we will continue to support our customers and ensure we follow through on the commitments made to them."

Total costs and expenses for the second quarter of 2008 were $52.6 million, which included $9.0 million of stock-based compensation expenses and $2.3 million for the previous stock-based compensation restatement and related legal expenses. This is compared to total costs and expenses of $63.0 million for the first quarter of 2008, which included $10.5 million of stock-based compensation expenses and $0.9 million of restatement and related legal expenses. General litigation expenses for the second quarter of 2008 were $9.1 million, a decrease of $4.1 million from the first quarter of 2008. As compared to the second quarter of last year, total costs and expenses decreased from $57.7 million, which included $10.3 million of stock-based compensation expenses and $7.5 million of restatement and related legal expenses. General litigation expenses in the second quarter of 2008 increased $2.4 million from the second quarter of 2007.

Total costs and expenses for the six months ended June 30, 2008 were $115.6 million, which included $19.5 million of stock-based compensation expenses and $3.2 million for the previous stock-based compensation restatement and related legal expenses. This is compared to total costs and expenses of $119.3 million for the same period of 2007, which included $19.7 million of stock-based compensation expenses and $14.5 million of restatement and related legal expenses. General litigation expenses for the six months ended June 30, 2008 were $22.3 million, an increase of $10.6 million from the same period in 2007.

During the second quarter of 2008, the Company recorded a valuation allowance of $130.5 million against its net deferred tax assets to fully reserve previously recorded tax benefits generated from its pre-tax losses in the U.S. Pursuant to the Statement of Financial Accounting Standard 109: Accounting for Income Taxes, the Company determined this valuation allowance is required due to significant negative evidence, such as cumulative losses in recent years and projected losses from operations. Projected income from settlements or litigation was not included in the determination for the valuation allowance. The valuation allowance will be maintained until sufficient positive evidence exists to support its reversal.

Net loss for the second quarter of 2008 of $144.7 million compares to a net loss of $12.6 million in the first quarter of 2008 and a net loss of $2.7 million in the second quarter of 2007. Net loss per share for the second quarter of 2008 was $1.38 as compared to a net loss per share of $0.12 in the first quarter of 2008 and a net loss per share of $0.03 for the second quarter of 2007. Net loss for the six months ended June 30, 2008 was $157.3 million as compared to a net loss of $6.6 million for the same period of 2007. Net loss per share for the six months ended June 30, 2008 was $1.50 as compared to a net loss per share of $0.06 in the same period of 2007.

Cash, cash equivalents and marketable securities as of June 30, 2008 were $394.2 million, down approximately $46.7 million from December 31, 2007 and up approximately $12.2 million from March 31, 2008. During the first quarter of 2008, the Company repurchased approximately 1.4 million shares of common stock for an aggregate value of $24.9 million and paid $18.3 million for the settlement of a class action suit. In April 2008, the Company also received $5.0 million of insurance proceeds related to reimbursement claims associated with the stock option investigation claims.

The conference call discussing second quarter results will be webcast live via the Rambus Investor Relations website (http://investor.rambus.com) at 2:00 p.m. Pacific Time today. A replay will be available following the call on Rambus' Investor Relations website and for one week at the following numbers: (888) 203-1112 (domestic) or (719) 457-0820 (international) with ID# 8040394.

About Rambus Inc.

Rambus is one of the world's premier technology licensing companies specializing in the invention and design of high-speed memory architectures. Additional information is available at www.rambus.com.

RMBSFN

 Press Release Financials                        Rambus
                                                 4440 El Camino Real
                                                 Los Altos, CA 94022

                Condensed Consolidated Balance Sheets
                            (In thousands)
                             (Unaudited)

                                                 June 30, December 31,
                                                   2008       2007
                                                 -------- ------------


ASSETS
--------

Current assets:
 Cash and cash equivalents                       $131,792     $119,391
 Marketable securities                            262,386      321,491
 Accounts receivable                                2,050          442
 Unbilled receivables                                 134        1,478
 Prepaids and other current assets                  8,746        8,349
 Deferred taxes                                       233       11,595
                                                 -------- ------------
        Total current assets                      405,341      462,746
                                                 -------- ------------

Restricted cash                                     2,412        2,286
Deferred taxes, long-term                           2,577      116,209
Intangible assets, net                             11,028       13,441
Property and equipment, net                        26,111       24,587
Goodwill                                            4,454        4,454
Other non-current assets                            5,350        3,624
                                                 -------- ------------
        Total assets                             $457,273     $627,347
                                                 ======== ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------------

Current liabilities:
 Accounts payable                                $  8,933     $ 11,283
 Accrued payroll and related benefits               6,070        9,985
 Accrued litigation expenses                       11,743       26,234
 Other accrued liabilities                          8,215        5,894
 Deferred revenue                                   2,467        2,756
                                                 -------- ------------
        Total current liabilities                  37,428       56,152
                                                 -------- ------------

Long-term liabilities:
 Convertible notes                                160,000      160,000
 Other long-term liabilities                        4,080        4,111
                                                 -------- ------------
        Total long-term liabilities               164,080      164,111
                                                 -------- ------------

Total stockholders' equity:                       255,765      407,084
                                                 -------- ------------
        Total liabilities and stockholders'
         equity                                  $457,273     $627,347
                                                 ======== ============

Press Release Financials                          Rambus
                                                  4440 El Camino Real
                                                  Los Altos, CA 94022

           Condensed Consolidated Statements of Operations
               (In thousands, except per share amounts)
                             (Unaudited)

                              Three Months Ended   Six Months Ended
                                    June 30,            June 30,
                             -----------------------------------------

                                2008      2007       2008      2007
                             ---------- --------- ---------- ---------

Revenue:
 Royalty revenue             $  32,288  $ 39,190  $  65,381  $ 82,936
 Contract revenue                3,427     8,353     10,072    14,757
                             ---------- --------- ---------- ---------
    Total revenues              35,715    47,543     75,453    97,693

Costs and expenses:
 Cost of contract revenues
  (1)                            6,567     6,882     13,800    13,097
 Research and development (1)   20,035    18,597     41,537    42,027
 Marketing, general and
  administrative (1)            23,768    24,778     57,089    49,743
 Costs of restatement and
  related legal activities       2,260     7,453      3,172    14,462
                             ---------- --------- ---------- ---------
    Total costs and expenses    52,630    57,710    115,598   119,329
                             ---------- --------- ---------- ---------


Operating loss                 (16,915)  (10,167)   (40,145)  (21,636)

Interest and other income,
 net                             2,908     5,657      7,503    10,851
                             ---------- --------- ---------- ---------

Loss before income taxes       (14,007)   (4,510)   (32,642)  (10,785)

Provision for (benefit from)
 income taxes                  130,657    (1,790)   124,656    (4,177)
                             ---------- --------- ---------- ---------

Net loss                     $(144,664) $ (2,720) $(157,298) $ (6,608)
                             ========== ========= ========== =========

Net loss per share:
 Basic                       $   (1.38) $  (0.03) $   (1.50) $  (0.06)
 Diluted                     $   (1.38) $  (0.03) $   (1.50) $  (0.06)

Weighted-Average Shares used in computing per share amounts:
 Basic                         104,804   103,820    104,743   103,820
 Diluted                       104,804   103,820    104,743   103,820

(1) Total stock-based compensation expense for the three and six month
 periods ended June 30, 2008 and June 30, 2007 are presented as
 follows:

                              Three Months Ended   Six Months Ended
                                    June 30,            June 30,
                             -----------------------------------------
                                  2008      2007       2008      2007
                             ---------- --------- ---------- ---------

 Cost of contract revenues   $   1,365  $  1,645  $   3,283  $  2,736
 Research and development        3,767     3,248      7,671     6,631
 Marketing, general and
  administrative                 3,821     5,431      8,528    10,374

SOURCE: Rambus

Rambus Inc.
Nicole Noutsios, 650-947-5050 (Investor Relations)
nnoutsios@rambus.com
Linda Ashmore, 650-947-5411 (Public Relations)
lashmore@rambus.com

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