LOS ALTOS, Calif., Apr 22, 2010 (BUSINESS WIRE) -- Rambus Inc. (NASDAQ:RMBS), one of the world's premier technology
licensing companies, today reported financial results for the first
quarter of 2010.
Revenue for the first quarter of 2010 was $161.9 million, up 425%
sequentially from the fourth quarter of 2009 and up 492% from the
quarter a year ago, primarily due to the agreements signed with Samsung
during the first quarter of 2010.
"The Samsung agreement was a transformational event driving record
revenues this quarter," said Harold Hughes, president and chief
executive officer at Rambus. "This agreement, along with the AMD license
renewal, reflects a recognition of the ongoing value of our portfolio of
patented innovations and demonstrates the momentum of our licensing
efforts."
Samsung is expected to make payments to the Company totaling
approximately $900.0 million over a five-year period in connection with
the settlement agreements, which include the purchase of 9.6 million
shares of Rambus common stock for $200.0 million. In the first quarter
of 2010, the Company received cash consideration of $425.0 million from
Samsung, recognized as follows:
-
Revenue of $137.1 million
-
Gain from settlement of $95.9 million
-
Contingently redeemable common stock and stockholders' equity of
$192.0 million related to the 9.6 million of common stock issued to
Samsung
The remaining $475.0 million is expected to be paid in successive
quarterly payments of approximately $25.0 million (subject to
adjustments per the terms of the license agreement), concluding in the
last quarter of 2014.
Revenue and cash receipts resulting from the Samsung agreement for the
first quarter of 2010 and future periods are expected to be recognized
as follows (in millions):
|
|
Q1 2010
|
|
Remainder
of 2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
137.1
|
|
$
|
44.1
|
|
$
|
93.8
|
|
$
|
100.0
|
|
$
|
100.0
|
|
$
|
100.0
|
|
Gain from settlement
|
|
95.9
|
|
|
30.9
|
|
|
6.2
|
|
|
--
|
|
|
--
|
|
|
--
|
|
Purchase of common stock
|
|
192.0
|
|
|
--
|
|
|
--
|
|
|
--
|
|
|
--
|
|
|
--
|
|
Total
|
$
|
425.0
|
|
$
|
75.0
|
|
$
|
100.0
|
|
$
|
100.0
|
|
$
|
100.0
|
|
$
|
100.0
|
A comparison of the current quarter with the previous quarter and the
prior year period is set out below:
|
Three Quarter Comparison
Condensed Consolidated Statements of Operations
(in millions)
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31, 2010
|
|
December 31, 2009
|
|
March 31, 2009
|
|
Revenue:
|
|
|
|
|
|
|
Royalties
|
$
|
160.6
|
|
|
$
|
30.2
|
|
|
$
|
26.1
|
|
|
Contract revenue
|
|
1.3
|
|
|
|
0.6
|
|
|
|
1.2
|
|
|
Total revenue
|
|
161.9
|
|
|
|
30.8
|
|
|
|
27.3
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
Cost of revenue
|
|
1.9
|
|
|
|
1.4
|
|
|
|
2.2
|
|
|
Research and development
|
|
21.7
|
|
|
|
17.0
|
|
|
|
17.8
|
|
|
Marketing, general and administrative
|
|
31.5
|
|
|
|
28.6
|
|
|
|
37.1
|
|
|
Costs (recoveries) of restatement and related legal activities
|
|
0.5
|
|
|
|
0.5
|
|
|
|
(13.6
|
)
|
|
Gain from settlement
|
|
(95.9
|
)
|
|
|
--
|
|
|
|
--
|
|
|
Total costs and expenses (recoveries)
|
|
(40.3
|
)
|
|
|
47.5
|
|
|
|
43.5
|
|
|
Operating income (loss)
|
|
202.2
|
|
|
|
(16.7
|
)
|
|
|
(16.2
|
)
|
|
Interest and other income, net
|
|
0.4
|
|
|
|
0.6
|
|
|
|
1.4
|
|
|
Interest expense
|
|
(6.0
|
)
|
|
|
(7.8
|
)
|
|
|
(2.6
|
)
|
|
Interest and other income (expense), net
|
|
(5.6
|
)
|
|
|
(7.2
|
)
|
|
|
(1.2
|
)
|
|
Income (loss) before income taxes
|
|
196.6
|
|
|
|
(23.9
|
)
|
|
|
(17.4
|
)
|
|
Provision for (benefit from) income taxes
|
|
45.7
|
|
|
|
(0.6
|
)
|
|
|
--
|
|
|
Net income (loss)
|
$
|
150.9
|
|
|
$
|
(23.3
|
)
|
|
$
|
(17.4
|
)
|
Total costs and expenses (recoveries) for the first quarter of 2010 were
a recovery of $40.3 million, which included $95.9 million gain related
to the Samsung settlement, $7.8 million of stock-based compensation
expenses and $0.5 million for previous stock-based compensation
restatement and related legal expenses. This is compared to total costs
and expenses of $47.5 million for the fourth quarter of 2009, which
included $7.6 million of stock-based compensation expenses and
$0.5 million for previous stock-based compensation restatement and
related legal expenses. General litigation expenses for the first
quarter were $7.0 million, a decrease of $3.6 million from the fourth
quarter of 2009.
Total costs and expenses in the first quarter of last year were $43.5
million, which included $8.4 million of stock-based compensation
expenses and a net recovery of $13.6 million of previous stock-based
compensation restatement and related legal expenses as a result of
reimbursements from insurance carriers and settlement payments from
former executives. General litigation expenses in the first quarter of
2010 decreased $11.0 million from the first quarter of 2009.
Interest and other expense, net, for the first quarter of 2010 was $5.6
million as compared to $7.2 million in the fourth quarter of 2009 and
$1.2 million in the first quarter of 2009.
During the quarter ended March 31, 2010, the Company paid withholding
taxes of $42.6 million to the Korean tax authorities. The Company
recorded a provision for income taxes of $45.7 million for the first
quarter of 2010, which is primarily comprised of the Korean taxes and
alternative minimum taxes. As the Company continues to maintain a
valuation allowance against its U.S. deferred tax assets, the Company's
tax provision is based on its anticipated cash tax payments related to
the quarter. By comparison, the Company recorded a tax benefit of $0.6
million for the quarter ended December 31, 2009 and a tax benefit of $7
thousand for the quarter ended March 31, 2009.
Net income for the first quarter of 2010 was $150.9 million as compared
to a net loss of $23.3 million in the fourth quarter of 2009 and a net
loss of $17.4 million in the first quarter of 2009. Diluted net income
per share for the first quarter of 2010 was $1.28 as compared to a net
loss per share of $0.22 in the fourth quarter of 2009 and a net loss per
share of $0.17 for the first quarter of 2009.
Cash, cash equivalents, and marketable securities as of March 31, 2010
were $668.7 million, up approximately $208.5 million from December 31,
2009. During the first quarter of 2010, the Company received
approximately $382.4 million related to the Samsung settlement agreement
net of withholding taxes, offset by cash used to settle the $137.0
million in face value of the Zero Coupon Convertible Senior Notes due
2010 and to repurchase common stock with an aggregate value of $26.5
million.
The conference call discussing 2010 first 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# 68105210.
About Rambus Inc.
Rambus is one of the world's premier technology licensing companies.
Founded in 1990, the Company specializes in the invention and design of
architectures focused on enhancing the end-user experience of computing,
communications and consumer electronics applications. Additional
information is available at www.rambus.com.
Forward-Looking Statements
This release contains forward-looking statements under the Private
Securities Litigation Reform Act of 1995 relating to the receipt by
Rambus of expected payments under its license agreement with Samsung and
related matters. The expected payments are subject to various
adjustments under the license agreement and subject to general business
and commercial risks. Such forward-looking statements are based on
current expectations, estimates and projections, management's beliefs
and certain assumptions made by Rambus' management. Actual results may
differ materially. Rambus' business generally is subject to a number of
risks which are described more fully in Rambus' periodic reports filed
with the Securities and Exchange Commission. Rambus undertakes no
obligation to update forward-looking statements to reflect events or
circumstances after the date hereof.
RMBSFN
|
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
March 31,
2010
|
|
December 31,
2009
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
400,921
|
|
$
|
289,073
|
|
Marketable securities
|
|
267,752
|
|
|
171,120
|
|
Accounts receivable
|
|
470
|
|
|
949
|
|
Prepaids and other current assets
|
|
8,662
|
|
|
8,700
|
|
Deferred taxes
|
|
587
|
|
|
129
|
|
Total current assets
|
|
678,392
|
|
|
469,971
|
|
Restricted cash
|
|
661
|
|
|
639
|
|
Deferred taxes, long-term
|
|
1,604
|
|
|
2,034
|
|
Intangible assets, net
|
|
22,105
|
|
|
21,660
|
|
Property and equipment, net
|
|
37,972
|
|
|
38,966
|
|
Goodwill
|
|
15,554
|
|
|
15,554
|
|
Other assets
|
|
6,579
|
|
|
7,045
|
|
Total assets
|
$
|
762,867
|
|
$
|
555,869
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
$
|
8,417
|
|
$
|
8,972
|
|
Accrued salaries and benefits
|
|
14,136
|
|
|
6,435
|
|
Accrued litigation expenses
|
|
4,555
|
|
|
5,147
|
|
Non-cash obligation for construction in progress
|
|
25,900
|
|
|
25,100
|
|
Other accrued liabilities
|
|
10,699
|
|
|
4,506
|
|
Convertible notes
|
|
--
|
|
|
136,032
|
|
Total current liabilities
|
|
63,707
|
|
|
186,192
|
|
Long-term liabilities:
|
|
|
|
|
Convertible notes
|
|
114,757
|
|
|
112,012
|
|
Other long-term liabilities
|
|
2,725
|
|
|
2,338
|
|
Total long-term liabilities
|
|
117,482
|
|
|
114,350
|
|
Contingently redeemable common stock
|
|
113,500
|
|
|
--
|
|
Total stockholders' equity
|
|
468,178
|
|
|
255,327
|
|
Total liabilities and stockholders' equity
|
$
|
762,867
|
|
$
|
555,869
|
|
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
Revenue:
|
|
|
|
Royalties
|
$
|
160,542
|
|
$
|
26,169
|
|
|
Contract revenue
|
|
1,322
|
|
|
1,165
|
|
|
Total revenue
|
|
161,864
|
|
|
27,334
|
|
|
Costs and expenses:
|
|
|
|
Cost of revenue (1)
|
|
1,854
|
|
|
2,183
|
|
|
Research and development (1)
|
|
21,691
|
|
|
17,837
|
|
|
Marketing, general and administrative (1)
|
|
31,527
|
|
|
37,156
|
|
|
Costs (recoveries) of restatement and related legal activities
|
|
526
|
|
|
(13,639
|
)
|
|
Gain from settlement
|
|
(95,900
|
)
|
|
--
|
|
|
Total costs and expenses (recoveries)
|
|
(40,302
|
)
|
|
43,537
|
|
|
Operating income (loss)
|
|
202,166
|
|
|
(16,203
|
)
|
|
Interest and other income, net
|
|
425
|
|
|
1,440
|
|
|
Interest expense
|
|
(6,016
|
)
|
|
(2,670
|
)
|
|
Interest and other income (expense), net
|
|
(5,591
|
)
|
|
(1,230
|
)
|
|
Income (loss) before income taxes
|
|
196,575
|
|
|
(17,433
|
)
|
|
Provision for (benefit from) income taxes
|
|
45,676
|
|
|
(7
|
)
|
|
Net income (loss)
|
$
|
150,899
|
|
$
|
(17,426
|
)
|
|
Net income (loss) per share:
|
|
|
|
Basic
|
$
|
1.33
|
|
$
|
(0.17
|
)
|
|
Diluted
|
$
|
1.28
|
|
$
|
(0.17
|
)
|
|
|
|
|
|
Weighted average shares used in per share calculation
|
|
|
|
Basic
|
|
113,132
|
|
|
104,376
|
|
|
Diluted
|
|
117,463
|
|
|
104,376
|
|
|
|
|
|
|
(1) Total stock-based compensation expense for the three month
periods ended
March 31, 2010 and March 31, 2009 are presented as follows:
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
Cost of revenue
|
$
|
100
|
|
$
|
390
|
|
|
Research and development
|
$
|
2,569
|
|
$
|
2,740
|
|
|
Marketing, general and administrative
|
$
|
5,165
|
|
$
|
5,289
|
|
SOURCE: Rambus Inc.
Rambus Inc.
Linda Ashmore, 650-947-5411 (Public Relations)
lashmore@rambus.com
Nicole Noutsios, 650-947-5050 (Investor Relations)
nnoutsios@rambus.com
Copyright Business Wire 2010