Business and Financial Highlights:
-
Signed license agreements with LSI Corporation and EchoStar
-
Marvell selected Cryptography Research's CryptoFirewall™
Anti-Counterfeiting Technology for use in Consumable Security Chip
-
Transferred a set of display patents to Acacia Research subsidiary
-
Quarterly revenue of $66.9 million; non-GAAP customer licensing income
of $72.1 million
-
Quarterly GAAP diluted loss per share of $0.09; non-GAAP diluted
income per share of $0.11
SUNNYVALE, Calif.--(BUSINESS WIRE)--
Rambus Inc. (NASDAQ:RMBS), the innovative technology solutions company
that brings invention to market, today reported financial results for
the first quarter ended March 31, 2013.
GAAP Financial Results:
Revenue for the first quarter of 2013 was $66.9 million, up 16% on a
sequential basis from the fourth quarter of 2012 primarily due to
recognition of one-time royalty revenue during the first quarter of 2013
from a patent license agreement with LSI Corporation. As compared to the
first quarter of 2012, revenue was up 6% for the same reason.
Total operating costs and expenses for the first quarter of 2013 were
$65.4 million, 6% higher than the previous quarter, primarily due to
bonus accruals and restructuring charges. First quarter operating costs
and expenses of $65.4 million included $2.0 million of general
litigation expenses, $4.9 million of stock-based compensation expenses,
$2.2 million of restructuring charges, $7.0 million of amortization
expenses and $4.0 million of retention bonuses from past business
acquisitions. This is compared to total operating costs and expenses for
the fourth quarter of 2012 of $61.5 million, which included $2.1 million
of general litigation expenses, $4.5 million of stock-based compensation
expenses, $0.7 million of restructuring charges, $6.8 million of
amortization expenses and $4.2 million of retention bonuses from past
business acquisitions. Total operating costs and expenses for the first
quarter of 2012 were $80.4 million, which included $4.1 million of
general litigation expenses, $6.7 million of stock-based compensation
expenses, $7.6 million of amortization expenses and $9.4 million of
acquisition-related transaction costs and retention bonuses from past
business acquisitions.
Net loss for the first quarter of 2013 was $10.4 million as compared to
net loss of $16.1 million in the fourth quarter of 2012 and net loss of
$27.9 million in the first quarter of 2012. Diluted net loss per share
for the first quarter of 2013 was $0.09 as compared to diluted net loss
per share of $0.14 in the fourth quarter of 2012 and diluted net loss
per share of $0.25 in the first quarter of 2012.
Non-GAAP Financial Results (1):
Customer licensing income in the first quarter of 2013 was $72.1
million, up 17% sequentially from the fourth quarter of 2012, and up 11%
from the first quarter of 2012, primarily due to recognition of one-time
royalty revenue during the first quarter of 2013 from a patent license
agreement with LSI Corporation.
Total non-GAAP operating costs and expenses in the first quarter of 2013
were $48.0 million, 6% higher than the previous quarter, primarily due
to the higher bonus accruals. Litigation expenses for the current
quarter, which are included in the non-GAAP operating costs and expenses
above, were $2.0 million. The prior quarter's non-GAAP operating costs
and expenses of $45.2 million included general litigation expenses of
$2.1 million. Total non-GAAP operating costs and expenses in the first
quarter of 2012 were $56.7 million, which included general litigation
expenses of $4.1 million.
Non-GAAP net income in the first quarter of 2013 was $13.4 million as
compared to non-GAAP net income of $8.3 million in the fourth quarter of
2012 and non-GAAP net income of $3.6 million in the first quarter of
2012. Non-GAAP diluted net income per share was $0.11 in the first
quarter of 2013 as compared to $0.07 in the fourth quarter of 2012 and
$0.03 in the first quarter of 2012.
Other Financial Highlights:
Cash, cash equivalents, and marketable securities as of March 31, 2013
were $214.8 million, an increase of approximately $11.5 million as
compared to December 31, 2012, due primarily to cash generated from
operations.
During the first quarter of 2013, the Company recorded an income tax
provision of approximately $4.5 million. As the Company continues to
maintain a full valuation allowance against its U.S. deferred tax
assets, the Company's tax provision consists of primarily foreign
withholding taxes.
The Company will host a conference call at 2:00 p.m. PT today to discuss
its financial results. The call, audio and slides will be available
online at investor.rambus.com.
A replay will be available following the call on the Rambus Investor
Relations website for one week at the following numbers: (855) 859-2056
(domestic) or (404) 537-3406 (international) with ID# 32237211.
(1) Non-GAAP Financial Information:
In the commentary set forth above and 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 (loss) and net income (loss). In
computing each of these non-GAAP financial measures, the Company
combined revenue, other patent royalties received but not recognized as
revenue and gain from settlement, and excluded charges or gains relating
to: stock-based compensation expenses, acquisition-related transaction
costs and retention bonus expense, amortization expenses, costs of
restatement and related legal activities, restructuring charges,
severance costs 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.
The Company's 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 cash royalties received from its
customers under its licensing agreements with them. In addition,
customer licensing income includes other patent royalties received but
not recognized as revenue. In both the fourth quarter of 2012 and first
quarter of 2013, a receipt of a patent royalty payment from a customer
was not recognized as revenue as not all revenue recognition criteria
were met during the period. Additionally, since the third quarter of
2011, the Company has received patent royalty payments from certain
patent license agreements assumed in the acquisition of CRI which were
treated as favorable contracts. Cash received from these acquired
favorable contracts reduced the favorable contract intangible asset on
the Company's balance sheet. The Company has combined these cash royalty
payments as customer licensing income to reflect the total amounts
received from its customers.
Stock-based compensation expense. These expenses consist
primarily of expenses related to employee stock options, employee stock
purchase plans, and employee non-vested equity stock and non-vested
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 peer
companies.
Acquisition-related transaction costs and retention bonus expense.
These expenses include all direct costs of certain acquisitions and the
current periods' portion of any retention bonus expense associated with
the acquisitions. The Company excludes these expenses in order to
provide better comparability between periods.
Restructuring charges. These charges may consist of severance,
contractual retention payments, exit costs and other charges and are
excluded because such charges are not directly related to ongoing
business results and do not reflect expected future operating expenses.
Amortization expense. The Company incurs expenses for the
amortization of intangible assets acquired in 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 ongoing operations.
Severance costs. These expenses relate to the separation payment
to the Company's former chief executive officer. The Company excludes
these costs from its non-GAAP measures because the Company believes that
these non-recurring costs have no direct correlation to the core
operations of the Company's business.
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.
On occasion in the future, there may be other items, such as impairment
of goodwill and long-lived assets or significant gains or losses from
contingencies that the Company may exclude in deriving its non-GAAP
financial measures if it believes that doing so is consistent with the
goal of providing useful information to investors and management.
About Rambus Inc.
Rambus is the innovative technology solutions company that brings
invention to market. Unleashing the intellectual power of our
world-class engineers and scientists in a collaborative and synergistic
way, Rambus invents, licenses and develops solutions that challenge and
enable our customers to create the future. While best known for creating
unsurpassed semiconductor memory architectures, Rambus is also
developing world-changing products and services in security, advanced
LED lighting and displays, and immersive mobile media. For additional
information visit rambus.com.
RMBSFN
|
|
|
Rambus Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2012
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
157,215
|
|
$
|
148,984
|
|
Marketable securities
|
|
|
57,613
|
|
|
54,346
|
|
Accounts receivable
|
|
|
60
|
|
|
529
|
|
Prepaids and other current assets
|
|
|
9,038
|
|
|
10,529
|
|
Deferred taxes
|
|
|
788
|
|
|
788
|
|
Total current assets
|
|
|
224,714
|
|
|
215,176
|
|
Intangible assets, net
|
|
|
145,930
|
|
|
153,173
|
|
Goodwill
|
|
|
124,969
|
|
|
124,969
|
|
Property, plant and equipment, net
|
|
|
78,218
|
|
|
86,905
|
|
Deferred taxes, long-term
|
|
|
4,806
|
|
|
4,458
|
|
Other assets
|
|
|
3,029
|
|
|
3,131
|
|
Total assets
|
|
$
|
581,666
|
|
$
|
587,812
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
4,036
|
|
$
|
7,918
|
|
Accrued salaries and benefits
|
|
|
31,925
|
|
|
23,992
|
|
Accrued litigation expenses
|
|
|
10,256
|
|
|
9,822
|
|
Other accrued liabilities
|
|
|
7,954
|
|
|
12,402
|
|
Total current liabilities
|
|
|
54,171
|
|
|
54,134
|
|
Long-term liabilities:
|
|
|
|
|
|
Convertible notes, long-term
|
|
|
151,487
|
|
|
147,556
|
|
Long-term imputed financing obligation
|
|
|
39,685
|
|
|
45,919
|
|
Other long-term liabilities
|
|
|
20,526
|
|
|
18,609
|
|
Total long-term liabilities
|
|
|
211,698
|
|
|
212,084
|
|
Total stockholders' equity
|
|
|
315,797
|
|
|
321,594
|
|
Total liabilities and stockholders' equity
|
|
$
|
581,666
|
|
$
|
587,812
|
|
|
|
|
|
|
|
|
|
Rambus Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
Revenue:
|
|
|
|
|
|
Royalties
|
|
$
|
66,222
|
|
|
$
|
62,043
|
|
|
Contract revenue
|
|
|
644
|
|
|
|
820
|
|
|
Total revenue
|
|
|
66,866
|
|
|
|
62,863
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
Cost of revenue (1)
|
|
|
5,249
|
|
|
|
7,163
|
|
|
Research and development (1)
|
|
|
32,848
|
|
|
|
38,394
|
|
|
Marketing, general and administrative (1)
|
|
|
25,105
|
|
|
|
34,834
|
|
|
Restructuring charges
|
|
|
2,206
|
|
|
|
—
|
|
|
Costs of restatement and related legal activities
|
|
|
17
|
|
|
|
30
|
|
|
Total operating costs and expenses
|
|
|
65,425
|
|
|
|
80,421
|
|
|
Operating income (loss)
|
|
|
1,441
|
|
|
|
(17,558
|
)
|
|
Interest income and other income (expense), net
|
|
|
(20
|
)
|
|
|
98
|
|
|
Interest expense
|
|
|
(7,312
|
)
|
|
|
(6,580
|
)
|
|
Interest and other income (expense), net
|
|
|
(7,332
|
)
|
|
|
(6,482
|
)
|
|
Loss before income taxes
|
|
|
(5,891
|
)
|
|
|
(24,040
|
)
|
|
Provision for income taxes
|
|
|
4,511
|
|
|
|
3,850
|
|
|
Net loss
|
|
$
|
(10,402
|
)
|
|
$
|
(27,890
|
)
|
|
Net loss per share:
|
|
|
|
|
|
Basic
|
|
$
|
(0.09
|
)
|
|
$
|
(0.25
|
)
|
|
Diluted
|
|
$
|
(0.09
|
)
|
|
$
|
(0.25
|
)
|
|
|
|
|
|
|
|
Weighted average shares used in per share calculation
|
|
|
|
|
|
Basic
|
|
|
111,599
|
|
|
|
110,358
|
|
|
Diluted
|
|
|
111,599
|
|
|
|
110,358
|
|
|
|
|
|
|
|
|
(1) Total stock-based compensation expense for the three month
periods ended
March 31, 2013 and 2012 are presented as follows:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
Cost of revenue
|
|
$
|
—
|
|
|
$
|
10
|
|
|
Research and development
|
|
$
|
1,876
|
|
|
$
|
2,720
|
|
|
Marketing, general and administrative
|
|
$
|
3,072
|
|
|
$
|
3,996
|
|
|
|
|
|
|
|
|
|
|
|
|
Rambus Inc.
Supplemental Reconciliation of GAAP to Non-GAAP Results
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31, 2013
|
|
|
December 31, 2012
|
|
|
March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
66,866
|
|
|
$
|
57,443
|
|
|
$
|
62,863
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other patent royalties received
|
|
|
5,237
|
|
|
|
4,175
|
|
|
|
2,414
|
|
|
Total customer licensing income
|
|
$
|
72,103
|
|
|
$
|
61,618
|
|
|
$
|
65,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
$
|
65,425
|
|
|
$
|
61,470
|
|
|
$
|
80,421
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Other patent royalties received
|
|
|
1,285
|
|
|
|
—
|
|
|
|
—
|
|
|
Stock-based compensation
|
|
|
(4,948
|
)
|
|
|
(4,516
|
)
|
|
|
(6,726
|
)
|
|
Acquisition-related transaction costs and retention bonuses
|
|
|
(4,012
|
)
|
|
|
(4,191
|
)
|
|
|
(9,351
|
)
|
|
Amortization
|
|
|
(7,040
|
)
|
|
|
(6,811
|
)
|
|
|
(7,616
|
)
|
|
Restructuring charges
|
|
|
(2,206
|
)
|
|
|
(679
|
)
|
|
|
—
|
|
|
Severance costs
|
|
|
(514
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Costs of restatement and related legal activities
|
|
|
(17
|
)
|
|
|
(52
|
)
|
|
|
(30
|
)
|
|
Non-GAAP operating costs and expenses
|
|
$
|
47,973
|
|
|
$
|
45,221
|
|
|
$
|
56,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$
|
1,441
|
|
|
$
|
(4,027
|
)
|
|
$
|
(17,558
|
)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other patent royalties received
|
|
|
3,952
|
|
|
|
4,175
|
|
|
|
2,414
|
|
|
Stock-based compensation
|
|
|
4,948
|
|
|
|
4,516
|
|
|
|
6,726
|
|
|
Acquisition-related transaction costs and retention bonuses
|
|
|
4,012
|
|
|
|
4,191
|
|
|
|
9,351
|
|
|
Amortization
|
|
|
7,040
|
|
|
|
6,811
|
|
|
|
7,616
|
|
|
Restructuring charges
|
|
|
2,206
|
|
|
|
679
|
|
|
|
—
|
|
|
Severance costs
|
|
|
514
|
|
|
|
—
|
|
|
|
—
|
|
|
Costs of restatement and related legal activities
|
|
|
17
|
|
|
|
52
|
|
|
|
30
|
|
|
Non-GAAP operating income
|
|
$
|
24,130
|
|
|
$
|
16,397
|
|
|
$
|
8,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
$
|
(5,891
|
)
|
|
$
|
(11,233
|
)
|
|
$
|
(24,040
|
)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other patent royalties received
|
|
|
3,952
|
|
|
|
4,175
|
|
|
|
2,414
|
|
|
Stock-based compensation
|
|
|
4,948
|
|
|
|
4,516
|
|
|
|
6,726
|
|
|
Acquisition-related transaction costs and retention bonuses
|
|
|
4,012
|
|
|
|
4,191
|
|
|
|
9,351
|
|
|
Amortization
|
|
|
7,040
|
|
|
|
6,811
|
|
|
|
7,616
|
|
|
Restructuring charges
|
|
|
2,206
|
|
|
|
679
|
|
|
|
—
|
|
|
Severance costs
|
|
|
514
|
|
|
|
—
|
|
|
|
—
|
|
|
Costs of restatement and related legal activities
|
|
|
17
|
|
|
|
52
|
|
|
|
30
|
|
|
Non-cash interest expense on convertible notes
|
|
|
4,089
|
|
|
|
3,839
|
|
|
|
3,510
|
|
|
Non-GAAP income before income taxes
|
|
$
|
20,887
|
|
|
$
|
13,030
|
|
|
$
|
5,607
|
|
|
Non-GAAP provision for income taxes
|
|
|
7,519
|
|
|
|
4,691
|
|
|
|
2,019
|
|
|
Non-GAAP net income
|
|
$
|
13,368
|
|
|
$
|
8,339
|
|
|
$
|
3,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net income per share
|
|
$
|
0.12
|
|
|
$
|
0.07
|
|
|
$
|
0.03
|
|
|
Non-GAAP diluted net income per share
|
|
$
|
0.11
|
|
|
$
|
0.07
|
|
|
$
|
0.03
|
|
|
Weighted average shares used in non-GAAP per share calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
111,599
|
|
|
|
111,332
|
|
|
|
110,358
|
|
|
Diluted
|
|
|
118,021
|
|
|
|
118,022
|
|
|
|
115,717
|
|
Rambus Inc.
Carolyn Robinson, 408-462-8717
Public Relations
crobinson@rambus.com
or
Rambus
Inc.
Nicole Noutsios, 408-462-8050
Investor Relations
nnoutsios@rambus.com
Source: Rambus Inc.
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