First Quarter Fiscal 2011 Business and Financial Highlights
-
Signed five-year patent license agreements with Panasonic Corporation
and Toshiba Corporation.
-
Demonstrated differential signaling for SoC-to-memory interfaces to 20
Gbps and extended single-ended signaling to 12.8 Gbps.
-
Introduced FlexModeTM interface technology, which enables
both differential and single-ended memory systems to be implemented in
a single SoC package design with no extra pins.
-
Revenue of $62.5 million; non-GAAP customer licensing income of $68.7
million.
-
GAAP diluted loss per share of $0.04.
-
Non-GAAP diluted income per share of $0.09.
SUNNYVALE, Calif.--(BUSINESS WIRE)--
Rambus Inc. (NASDAQ:RMBS), one of the world's premier technology
licensing companies, today reported financial results for the first
quarter ended March 31, 2011.
GAAP Financial Results
Revenue for the first quarter of 2011 was $62.5 million, down 31%
sequentially from the fourth quarter of 2010 primarily due to one-time
catch up revenue from the Elpida and Renesas license agreements in the
fourth quarter of 2010. As compared to the first quarter of 2010,
revenue was down 61% primarily due to revenue recognized from agreements
signed with Samsung during the first quarter of 2010.
Total operating costs and expenses for the first quarter of 2011 were
$54.2 million, which included general litigation expenses of $9.2
million and a credit from gain from settlement of $6.2 million. This is
compared to total operating costs and expenses for the fourth quarter of
2010 of $48.0 million, which included general litigation expenses of
$5.8 million and a credit from gain from settlement of $10.3 million.
Total operating costs and expenses (recoveries) in the first quarter of
2010 were a recovery of $40.3 million, which included general litigation
expenses of $7.0 million and a credit from gain from settlement of $95.9
million.
Net loss for the first quarter of 2011 was $4.2 million as compared to a
net income of $33.1 million in the fourth quarter of 2010 and a net
income of $150.9 million in the first quarter of 2010. Diluted net loss
per share for the first quarter of 2011 was $0.04 as compared to a net
income per share of $0.29 in the fourth quarter of 2010 and a net income
per share of $1.28 in the first quarter of 2010.
Non-GAAP Financial Results (1)
Customer licensing income in the first quarter of 2011 was $68.7 million
as compared to $101.2 million in the fourth quarter of 2010 and $257.8
million in the first quarter of 2010.
Non-GAAP operating costs and expenses in the first quarter of 2011 were
$49.9 million as compared to $48.7 million in the fourth quarter of 2010
and $46.2 million in the first quarter of 2010.
Non-GAAP operating income in the first quarter of 2011 was $18.8 million
as compared to $52.5 million in the fourth quarter of 2010 and $211.6
million in the first quarter of 2010.
Non-GAAP net income in the first quarter of 2011 was $10.2 million as
compared to $32.1 million in the fourth quarter of 2010 and $134.3
million in the first quarter of 2010.
Other Financial Highlights
Cash, cash equivalents, and marketable securities as of March 31, 2011
were $508.6 million, a decrease of approximately $3.4 million from
December 31, 2010. The decrease was primarily due to cash used in
operations and for purchases of property, plant and equipment during the
quarter.
During the quarter ended March 31, 2011, the Company paid withholding
taxes of approximately $4.2 million. As the Company continues to
maintain a valuation allowance against its U.S. deferred tax assets, the
Company's tax provision is based on a projected annual effective tax
rate consisting of state, foreign and withholding taxes applied to
year-to-date pretax income results for the quarter.
The conference call discussing 2011 first quarter results will be
webcast and can be accessed via Rambus' web site at http://investor.rambus.com
at 2:00pm Pacific Time today. A replay will be available following the
call on Rambus' Investor Relations web site or for one week at the
following numbers: (800) 642-1687 (domestic) or (706) 645-9291
(international) with ID#58589190.
Forward Looking Statements
This press release may contain forward-looking statements related to our
estimates and expectations for future financial performance and other
related events. Actual results may differ materially from those
contained in any forward-looking statements. Please refer to the
documents Rambus files with the SEC, including Rambus' most recent Form
10-K and Form 10-Q. These SEC filings contain and identify important
factors that could cause Rambus' consolidated financial results to
differ materially from those contained in Rambus' forward-looking
statements. Although Rambus believes that the expectations reflected in
the forward-looking statements are reasonable, Rambus cannot guarantee
future results, levels of activity, performance or achievements. Rambus
is under no duty to update any of the forward-looking statements after
the date of this press release to conform to actual results. Our
business generally is subject to a number of risks which are described
more fully in our SEC filings including our Forms 10-K and 10-Q.
(1) Non-GAAP Financial Information
In the commentary set forth above and/or in the financial statements
included in this earnings release, the Company presents the following
non-GAAP financial measures: customer licensing income, operating costs
and expenses, operating income and net income. In computing each of
these non-GAAP financial measures, the Company combines revenue and gain
from settlement and excludes charges or gains relating to: stock-based
compensation expenses, amortization expenses, costs of restatement and
related legal activities and non-cash interest expense. The non-GAAP
financial measures disclosed by the Company should not be considered a
substitute for, or superior to, financial measures calculated in
accordance with GAAP, and the financial results calculated in accordance
with GAAP and reconciliations from these results should be carefully
evaluated. Management believes the non-GAAP financial measures are
appropriate for both its own assessment of, and to show investors, how
the Company's performance compares to other periods. The non-GAAP
financial measures used by the Company may be calculated differently
from, and therefore may not be comparable to, similarly titled measures
used by other companies. Reconciliation from GAAP to non-GAAP results is
included in the financial statements contained in this release.
Our non-GAAP financial measures reflect adjustments based on the
following items:
Customer licensing income. Customer licensing income includes the
Company's measure of the total royalties received from our customers,
under our licensing agreement with them. In connection with the Samsung
settlement, the Company bifurcates royalty payments that it receives
between revenue and gain from settlement, which is reflected as a contra
expense in operating expenses for GAAP purposes. The Company has
combined revenue from our customers, including Samsung, and the gain
from the Samsung settlement as customer licensing income to reflect the
total amounts received from our customers, including Samsung under the
relevant agreements.
Stock-based compensation expense. These expenses consist
primarily of expenses related to employee stock options, employee stock
purchase plans, employee restricted stock and employee restricted stock
units. The Company excludes stock-based compensation expense from its
non-GAAP measures primarily because they are non-cash expenses that the
Company does not believe are reflective of ongoing operating results.
Additionally, given the fact that other companies may grant different
amounts and types of equity awards and may use different option
valuation assumptions, excluding stock-based compensation expense
permits more accurate comparisons of the Company's results with other
peer companies.
Amortization expense. The Company incurs expenses for the
amortization of intangible assets in connection with acquisitions. The
Company excludes these items because these expenses are not reflective
of ongoing operating results in the period incurred. These amounts arise
from the Company's prior acquisitions and have no direct correlation to
the core operation of the Company's business.
Costs of restatement and related legal activities. These expenses
consist primarily of investigation, audit, legal and other professional
fees related to the 2006-2007 stock option investigation and related
litigation, as well as recoveries received from third parties. The
Company excludes these costs and recoveries from its non-GAAP measures
primarily because the Company believes that these non-recurring costs
and recoveries have no direct correlation to the core operation of the
Company's business.
Non-cash interest expense. The Company incurs non-cash interest
expense related to its convertible notes. The Company excludes non-cash
interest expense related to its convertible notes to provide more
accurate comparisons of the Company's results with other peer companies
and to more accurately reflect the Company's on-going operations.
Income tax adjustments. For purposes of internal forecasting,
planning and analyzing future periods that assumes net income from
operations, the Company estimates a fixed, long-term projected tax rate
of approximately 36 percent. Accordingly, the Company has applied the 36
percent tax rate to its non-GAAP financial results to assist the
Company's planning for future periods.
From time to time in the future, there may be other items, such as
significant asset impairments, restructuring charges or significant
gains or losses from contingencies that the Company may exclude if it
believes that doing so is consistent with the goal of providing useful
information to investors and management.
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 enriching the end-user experience of electronic
systems. Additional information is available at www.rambus.com.
RMBSFN
|
|
|
Rambus Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
March 31,
2011
|
|
December 31,
2010
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
182,234
|
|
$
|
215,262
|
|
Marketable securities
|
|
|
326,341
|
|
|
296,747
|
|
Accounts receivable
|
|
|
389
|
|
|
2,600
|
|
Prepaids and other current assets
|
|
|
10,988
|
|
|
10,898
|
|
Deferred taxes
|
|
|
2,420
|
|
|
2,420
|
|
Total current assets
|
|
|
522,372
|
|
|
527,927
|
|
Deferred taxes, long-term
|
|
|
3,020
|
|
|
2,974
|
|
Intangible assets, net
|
|
|
39,007
|
|
|
40,986
|
|
Goodwill
|
|
|
18,154
|
|
|
18,154
|
|
Property, plant and equipment, net
|
|
|
70,520
|
|
|
67,770
|
|
Other assets
|
|
|
6,086
|
|
|
5,361
|
|
Total assets
|
|
$
|
659,159
|
|
$
|
663,172
|
|
|
|
|
|
|
|
LIABILITIES, CONTINGENTLY REDEEMABLE COMMON STOCK & STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
11,292
|
|
$
|
5,952
|
|
Accrued salaries and benefits
|
|
|
9,907
|
|
|
31,634
|
|
Accrued litigation expenses
|
|
|
4,744
|
|
|
4,060
|
|
Other accrued liabilities
|
|
|
11,778
|
|
|
14,165
|
|
Total current liabilities
|
|
|
37,721
|
|
|
55,811
|
|
Long-term liabilities:
|
|
|
|
|
|
Convertible notes, long-term
|
|
|
124,359
|
|
|
121,500
|
|
Long-term imputed financing obligation
|
|
|
34,362
|
|
|
27,899
|
|
Other long-term liabilities
|
|
|
9,690
|
|
|
9,679
|
|
Total long-term liabilities
|
|
|
168,411
|
|
|
159,078
|
|
Contingently redeemable common stock
|
|
|
113,500
|
|
|
113,500
|
|
Total stockholders' equity
|
|
|
339,527
|
|
|
334,783
|
|
Total liabilities, contingently redeemable common stock and
stockholders' equity
|
|
$
|
659,159
|
|
$
|
663,172
|
|
|
|
Rambus Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
Revenue:
|
|
|
|
|
|
Royalties
|
|
$
|
59,235
|
|
|
$
|
160,542
|
|
|
Contract revenue
|
|
|
3,292
|
|
|
|
1,322
|
|
|
Total revenue
|
|
|
62,527
|
|
|
|
161,864
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
Cost of revenue (1)
|
|
|
3,149
|
|
|
|
1,854
|
|
|
Research and development (1)
|
|
|
23,317
|
|
|
|
21,691
|
|
|
Marketing, general and administrative (1)
|
|
|
32,732
|
|
|
|
31,527
|
|
|
Costs of restatement and related legal activities
|
|
|
1,159
|
|
|
|
526
|
|
|
Gain from settlement
|
|
|
(6,200
|
)
|
|
|
(95,900
|
)
|
|
Total operating costs and expenses (recoveries)
|
|
|
54,157
|
|
|
|
(40,302
|
)
|
|
Operating income
|
|
|
8,370
|
|
|
|
202,166
|
|
|
Interest income and other income (expense), net
|
|
|
(652
|
)
|
|
|
425
|
|
|
Interest expense on convertible notes
|
|
|
(5,172
|
)
|
|
|
(6,016
|
)
|
|
Interest and other income (expense), net
|
|
|
(5,824
|
)
|
|
|
(5,591
|
)
|
|
Income before income taxes
|
|
|
2,546
|
|
|
|
196,575
|
|
|
Provision for income taxes
|
|
|
6,776
|
|
|
|
45,676
|
|
|
Net income (loss)
|
|
$
|
(4,230
|
)
|
|
$
|
150,899
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
Basic
|
|
$
|
(0.04
|
)
|
|
$
|
1.33
|
|
|
Diluted
|
|
$
|
(0.04
|
)
|
|
$
|
1.28
|
|
|
|
|
|
|
|
|
Weighted average shares used in per share calculation
|
|
|
|
|
|
Basic
|
|
|
107,613
|
|
|
|
113,132
|
|
|
Diluted
|
|
|
107,613
|
|
|
|
117,463
|
|
|
|
|
|
|
|
|
(1) Total stock-based compensation expense for the three month
periods ended
March 31, 2011 and March 31, 2010 are presented
as follows:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
Cost of revenue
|
|
$
|
123
|
|
|
$
|
100
|
|
|
Research and development
|
|
$
|
2,512
|
|
|
$
|
2,569
|
|
|
Marketing, general and administrative
|
|
$
|
4,655
|
|
|
$
|
5,165
|
|
|
|
|
Rambus Inc.
|
|
Supplemental Reconciliation of GAAP to Non-GAAP Results
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2011
|
|
December 31, 2010
|
|
March 31, 2010
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
62,527
|
|
|
$
|
90,921
|
|
|
$
|
161,864
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Gain from settlement
|
|
|
6,200
|
|
|
|
10,300
|
|
|
|
95,900
|
|
|
Total customer licensing income
|
|
$
|
68,727
|
|
|
$
|
101,221
|
|
|
$
|
257,764
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses (recoveries)
|
|
$
|
54,157
|
|
|
$
|
48,038
|
|
|
|
(40,302
|
)
|
|
Adjustments:
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
(7,290
|
)
|
|
|
(7,320
|
)
|
|
|
(7,834
|
)
|
|
Amortization
|
|
|
(1,979
|
)
|
|
|
(1,479
|
)
|
|
|
(1,086
|
)
|
|
Costs of restatement and related legal activities
|
|
|
(1,159
|
)
|
|
|
(797
|
)
|
|
|
(526
|
)
|
|
Gain from settlement
|
|
|
6,200
|
|
|
|
10,300
|
|
|
|
95,900
|
|
|
Non-GAAP operating costs and expenses
|
|
$
|
49,929
|
|
|
$
|
48,742
|
|
|
$
|
46,152
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
8,370
|
|
|
$
|
42,883
|
|
|
$
|
202,166
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
7,290
|
|
|
|
7,320
|
|
|
|
7,834
|
|
|
Amortization
|
|
|
1,979
|
|
|
|
1,479
|
|
|
|
1,086
|
|
|
Costs of restatement and related legal activities
|
|
|
1,159
|
|
|
|
797
|
|
|
|
526
|
|
|
Non-GAAP operating income
|
|
$
|
18,798
|
|
|
$
|
52,479
|
|
|
$
|
211,612
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(4,230
|
)
|
|
$
|
33,084
|
|
|
|
150,899
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
7,290
|
|
|
|
7,320
|
|
|
|
7,834
|
|
|
Amortization
|
|
|
1,979
|
|
|
|
1,479
|
|
|
|
1,086
|
|
|
Costs of restatement and related legal activities
|
|
|
1,159
|
|
|
|
797
|
|
|
|
526
|
|
|
Non-cash interest expense on convertible notes
|
|
|
3,016
|
|
|
|
2,834
|
|
|
|
3,860
|
|
|
Income tax adjustments
|
|
|
1,020
|
|
|
|
(13,430
|
)
|
|
|
(29,881
|
)
|
|
Non-GAAP net income
|
|
$
|
10,234
|
|
|
$
|
32,084
|
|
|
$
|
134,324
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net income per share
|
|
$
|
0.10
|
|
|
$
|
0.29
|
|
|
$
|
1.19
|
|
|
Non-GAAP diluted net income per share
|
|
$
|
0.09
|
|
|
$
|
0.28
|
|
|
$
|
1.14
|
|
|
Weighted average shares used in non-GAAP per share calculation:
|
|
|
|
|
|
|
|
Basic
|
|
|
107,613
|
|
|
|
111,530
|
|
|
|
113,132
|
|
|
Diluted
|
|
|
110,626
|
|
|
|
114,461
|
|
|
|
117,463
|
|
Rambus Inc.
Linda Ashmore, 408-462-8411
Public Relations
lashmore@rambus.com
Nicole
Noutsios, 408-462-8050
Investor Relations
nnoutsios@rambus.com
Source: Rambus Inc.
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