Rambus Inc.
Oct 23, 2008

Rambus Reports Third Quarter Financial Results

Revenue of $29.4 million; loss of $0.27 per share

LOS ALTOS, Calif., Oct 23, 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 third quarter of 2008.

Revenues for the third quarter of 2008 were $29.4 million, down 17.6% sequentially from the second quarter and down 29.5% over the third quarter of last year. Revenues for the nine months ended September 30, 2008 were $104.9 million, down 24.8% over the same period of last year.

"With the FTC restrictions on our royalties removed and annual savings of $17 million expected through our restructuring efforts, we are confident in our ability to pursue our strategic objectives," said Harold Hughes, president and chief executive officer at Rambus. "Foremost among these is our steadfast commitment to investments in breakthrough technology, and efforts to protect and be fully compensated for our patented inventions."

Total costs and expenses for the third quarter of 2008 were $60.0million, which included $9.0 million of stock-based compensation expenses, $4.0 million of restructuring related expenses, $2.2 million of asset impairment expenses and $0.4million for the previous stock-based compensation restatement and related legal expenses. This is compared to total costs and expenses of $52.6million for the second quarter of 2008, which included $9.0 million of stock-based compensation expenses and $2.3million of restatement and related legal expenses. General litigation expenses for the third quarter of 2008 were $15.7 million, an increase of $6.6million from the second quarter of 2008.

As compared to the third quarter of last year, total costs and expenses increased from $58.2 million, which included $8.7 million of stock-based compensation expenses and $4.2million of restatement and related legal expenses. General litigation expenses in the third quarter of 2008 increased $4.0 million from the third quarter of 2007.

Total costs and expenses for the nine months ended September 30, 2008 were $175.6 million, which included $28.5 million of stock-based compensation expenses, $4.0 million of restructuring-related expenses, $2.2 million of asset impairment expenses and $3.6million for the previous stock-based compensation restatement and related legal expenses. This is compared to total costs and expenses of $177.5million for the same period of 2007, which included $28.4 million of stock-based compensation expenses and $18.6million of restatement and related legal expenses. General litigation expenses for the nine months ended September 30, 2008 were $38.0 million, an increase of $14.7million from the same period in 2007.

Net loss for the third quarter of 2008 was $27.9million compared to a net loss of $144.7million in the second quarter of 2008 and a net loss of $6.5million in the third quarter of 2007. Net loss per share for the third quarter of 2008 was $0.27 as compared to a net loss per share of $1.38 in the second quarter of 2008 and a net loss per share of $0.06 for the third quarter of 2007. Net loss for the nine months ended September 30, 2008 was $185.2 million as compared to a net loss of $13.1 million for the same period of 2007. Net loss per share for the nine months ended September 30, 2008 was $1.77 as compared to a net loss per share of $0.13 in the same period of 2007.

Cash, cash equivalents and marketable securities as of September30, 2008 were $379.0million, down approximately $15.2 million from June 30, 2008 and down approximately $61.9million from December31, 2007. During the third quarter of 2008, the Company repurchased approximately 0.6 million shares of common stock for an aggregate value of $10.0 million. During the first nine months of the year, the Company repurchased approximately 2.0 million shares of common stock for an aggregate value of $34.9 million and also paid out a net of $13.3 million related to the settlement of a class action lawsuit related to the timing of past stock option grants.

The conference call discussing third 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#5134540.

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)
                                                                      September 30,          December 31,
                                                                              2008                   2007
ASSETS
Current assets:
Cash and cash equivalents                                             $       106,786        $       119,391
Marketable securities                                                         272,186                321,491
Accounts receivable                                                           1,740                  442
Unbilled receivables                                                          690                    1,478
Prepaids and other current assets                                             8,141                  8,349
Deferred taxes                                                                222                    11,595
                    Total current assets                                      389,765                462,746
Restricted cash                                                               1,238                  2,286
Deferred taxes, long-term                                                     2,613                  116,209
Intangible assets, net                                                        8,040                  13,441
Property and equipment, net                                                   23,672                 24,587
Goodwill                                                                      4,454                  4,454
Other non-current assets                                                      4,791                  3,624
                    Total assets                                      $       434,573        $       627,347
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                      $       9,091          $       11,283
Accrued payroll and related benefits                                          9,478                  9,985
Accrued litigation expenses                                                   13,636                 26,234
Other accrued liabilities                                                     5,467                  5,894
Deferred revenue                                                              2,329                  2,756
                    Total current liabilities                                 40,001                 56,152
Long-term liabilities:
Convertible notes                                                             160,000                160,000
Other long-term liabilities                                                   3,824                  4,111
                    Total long-term liabilities                               163,824                164,111
Total stockholders' equity:                                                   230,748                407,084
                    Total liabilities and stockholders' equity        $       434,573        $       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 September 30,                               Nine Months Ended September 30,
                                                                   2008                             2007                        2008                        2007
Revenue:
Royalty revenue                                            $       25,793                   $       35,327                $     91,174                $     118,263
Contract revenue                                                   3,635                            6,388                       13,707                      21,145
Total revenues                                                     29,428                           41,715                      104,881                     139,408
Costs and expenses:
Cost of contract revenues (1)                                      4,611                            5,781                       18,411                      18,878
Research and development (1)                                       17,511                           18,312                      59,048                      60,339
Marketing, general and administrative (1)                          31,288                           29,914                      88,377                      79,657
Restructuring costs (1)                                            4,024                            -                           4,024                       -
Impairment of asset                                                2,158                            -                           2,158                       -
Costs of restatement and related legal activities                  392                              4,169                       3,564                       18,631
Total costs and expenses                                           59,984                           58,176                      175,582                     177,505
Operating loss                                                     (30,556  )                       (16,461  )                  (70,701   )                 (38,097  )
Interest and other income, net                                     2,704                            5,645                       10,207                      16,496
Loss before income taxes                                           (27,852  )                       (10,816  )                  (60,494   )                 (21,601  )
Provision for (benefit from) income taxes                          92                               (4,318   )                  124,748                     (8,495   )
Net loss                                                   $       (27,944  )               $       (6,498   )            $     (185,242  )           $     (13,106  )
Net loss per share:
Basic                                                      $       (0.27    )               $       (0.06    )            $     (1.77     )           $     (0.13    )
Diluted                                                    $       (0.27    )               $       (0.06    )            $     (1.77     )           $     (0.13    )
Weighted-Average Shares used in computing per share amounts:
Basic                                                              104,897                          103,820                     104,795                     103,820
Diluted                                                            104,897                          103,820                     104,795                     103,820
(1) Total stock-based compensation expense for the three and nine
month periods ended September 30, 2008 and September 30, 2007 are
presented as follows:
                                                           Three Months Ended September 30,                               Nine Months Ended September 30,
                                                                   2008                             2007                        2008                        2007
Cost of contract revenues                                  $       1,321                    $       1,333                 $     4,604                 $     4,069
Research and development                                           3,326                            3,190                       10,997                      9,821
Marketing, general and administrative                              4,371                            4,138                       12,899                      14,512
Restructuring costs                                                547                              -                           547                         -

SOURCE: Rambus Inc.

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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