Business and Financial Highlights:
-
Generated quarterly revenue of $72.8 million
-
Extended license agreement with SK hynix to 2024
-
Renewed license agreement with Renesas Electronics Corporation
-
GAAP diluted net income per share of $0.06; non-GAAP diluted net
income per share of $0.13
SUNNYVALE, Calif.--(BUSINESS WIRE)--
Rambus Inc. (NASDAQ:RMBS) today reported financial results for the
second quarter ended June 30, 2015.
GAAP Financial Results:
Revenue for the second quarter of 2015 was $72.8 million, which was
relatively flat on a sequential basis from the first quarter of 2015
primarily due to higher sales of security products offset by lower
royalty revenue. As compared to the second quarter of 2014, revenue was
down 5% primarily due to lower royalty revenue, offset by higher revenue
from a new license agreement signed with IBM during the first quarter of
2015 as well as higher sales of security and lighting products.
Revenue for the six months ended June 30, 2015 was $145.7 million, which
was down 6% over the prior year period, primarily due to lower royalty
revenue from ST Microelectronics and NVIDIA Corporation, offset by
higher revenue from a new license agreement signed with IBM during the
first quarter of 2015 as well as higher sales of security and lighting
products.
Total operating costs and expenses for the second quarter of 2015 were
$57.3 million, 4% higher than the previous quarter and 2% higher than
the second quarter of 2014. Second quarter operating costs and expenses
of $57.3 million included $4.4 million of stock-based compensation
expenses and $6.3 million of amortization expenses. In comparison, total
operating costs and expenses for the first quarter of 2015 of $55.0
million included $3.8 million of stock-based compensation expenses and
$6.3 million of amortization expenses. Total operating costs and
expenses for the second quarter of 2014 were $56.4 million, which
included $4.9 million of stock-based compensation expenses, $6.8 million
of amortization expenses and $1.0 million of retention bonus expense
from acquisitions. The change in total operating costs and expenses in
the second quarter of 2015 as compared to the first quarter of 2015 was
primarily due to lower gain from sale of intellectual property, higher
prototyping costs and higher costs of sales due to sale of security and
lighting products, partially offset by lower headcount related costs and
lower bonus accrual expense. The change in total operating costs and
expenses in the second quarter of 2015 as compared to the second quarter
of 2014 was primarily attributable to higher headcount related costs,
higher costs of sales due to sale of security and lighting products and
higher prototyping costs offset by higher gain from sale of intellectual
property and lower retention bonus expense from acquisitions.
Total operating costs and expenses for the six months ended June 30,
2015 were $112.3 million, 1% higher than the six months ended June 30,
2014. The six months operating costs and expenses of $112.3 million
included $8.2 million of stock-based compensation expenses and $12.6
million of amortization expenses. This is compared to total operating
costs and expenses for the six months ended June 30, 2014 of $111.5
million, which included $7.8 million of stock-based compensation
expenses, $13.6 million of amortization expenses and $2.5 million of
retention bonus expense from acquisitions. The change in total operating
costs and expenses was primarily attributable to higher headcount
related costs, higher cost of sales due to the sale of security and
lighting products and higher prototyping costs offset by higher gain
from sale of intellectual property, lower retention bonus expense from
acquisitions and lower consulting costs.
Net income for the second quarter of 2015 was $6.9 million as compared
to net income of $9.5 million in the first quarter of 2015 and net
income of $5.0 million in the second quarter of 2014. Diluted net income
per share for the second quarter of 2015 was $0.06 as compared to
diluted net income per share of $0.08 in the first quarter of 2015 and
diluted net income per share of $0.04 in the second quarter of 2014,
respectively.
Net income for the six months ended June 30, 2015 was $16.4 million as
compared to a net income of $12.8 million for the same period of 2014.
Diluted net income per share for the six months ended June 30, 2015 was
$0.14 as compared to a diluted net income per share of $0.11 for the
same period of 2014.
Non-GAAP Financial Results (1):
Total non-GAAP operating costs and expenses in the second quarter of
2015 were $46.5 million, 4% higher than the previous quarter, and 6%
higher than the second quarter of 2014.
Total non-GAAP operating costs and expenses for the six months ended
June 30, 2015 were $91.5 million as compared to $87.7 million in the
same period of 2014 due primarily to higher headcount related costs,
higher cost of sales due to the sale of security and lighting products
and higher prototyping costs, offset by higher gain from sale of
intellectual property and lower consulting costs.
Non-GAAP net income in the second quarter of 2015 was $16.0 million, 6%
lower than the prior quarter and 15% lower than the second quarter of
2014. Non-GAAP diluted net income per share was $0.13 in the second
quarter of 2015 as compared to $0.14 in the prior quarter and $0.16 in
the second quarter of 2014.
Non-GAAP net income for the six months ended June 30, 2015 was $33.0
million as compared to $38.6 million in the same period of 2014.
Non-GAAP diluted net income per share was $0.28 for the six months ended
June 30, 2015 as compared to non-GAAP diluted net income per share of
$0.33 in the same period of 2014.
Other Financial Highlights:
Cash, cash equivalents, and marketable securities as of June 30, 2015
were $348.1 million, an increase of $30.4 million from March 31, 2015.
The increase in cash was driven by operating activities.
During the second quarter of 2015, the Company recorded an income tax
provision of approximately $5.8 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.
Third Quarter 2015 Outlook:
For the third quarter of 2015, the Company expects revenue to be between
$73 million and $78 million. Revenue is not without risk and includes
expectations that the Company will sign new customer agreements for
patent and solutions licensing.
Conference Call:
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 as a webcast on the Rambus
Investor Relations website and for one week at the following numbers:
(855) 859-2056 (domestic) or (404) 537-3406 (international) with ID#
77962571.
(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: operating costs and expenses, operating
income (loss) and net income (loss). In computing each of these non-GAAP
financial measures, the following items were considered as discussed
below: stock-based compensation expenses, acquisition-related
transaction costs and retention bonus expense, amortization expenses,
restructuring charges, non-cash interest expense and certain other
one-time adjustments. 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:
Stock-based compensation expense. These expenses primarily relate
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 such expenses 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 operation of the Company's core business.
Non-cash interest expense on convertible notes. 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.
Income tax adjustments. For purposes of internal forecasting,
planning and analyzing future periods that assume net income from
operations, the Company estimates a fixed, long-term projected tax rate
of approximately 36 percent, which consists of estimated U.S. federal
and state tax rates, and excludes tax rates associated with certain
items such as withholding tax, tax credits and deferred tax asset
valuation allowance. Accordingly, the Company has applied the 36 percent
tax rate to its non-GAAP financial results for all periods to assist the
Company's planning for future periods. The Company has provided below a
reconciliation of its GAAP provision for income taxes and GAAP effective
tax rate to the assumed non-GAAP provision for income taxes and non-GAAP
effective tax rate.
On occasion in the future, there may be other items, such as impairments
and 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.
Forward-Looking Statements
This release contains forward-looking statements under the Private
Securities Litigation Reform Act of 1995 including relating to Rambus'
expectations regarding revenue for the third quarter of 2015 and
estimated, fixed, long-term projected tax rates. 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.
About Rambus Inc.
Rambus brings invention to market. Our customizable IP cores,
architecture licenses, tools, services, and training improve the
competitive advantage of our customers' products while accelerating
their time-to-market. Rambus products and innovations capture, secure
and move data. For more information, visit www.rambus.com.
RMBSFN
|
Rambus Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
201,477
|
|
|
$
|
154,126
|
|
Marketable securities
|
|
146,649
|
|
|
145,983
|
|
Accounts receivable
|
|
6,745
|
|
|
6,001
|
|
Prepaids and other current assets
|
|
9,690
|
|
|
8,541
|
|
Deferred taxes
|
|
1,113
|
|
|
187
|
|
Total current assets
|
|
365,674
|
|
|
314,838
|
|
Intangible assets, net
|
|
76,694
|
|
|
89,371
|
|
Goodwill
|
|
116,899
|
|
|
116,899
|
|
Property, plant and equipment, net
|
|
60,689
|
|
|
64,023
|
|
Deferred taxes, long-term
|
|
454
|
|
|
536
|
|
Other assets
|
|
3,345
|
|
|
2,612
|
|
Total assets
|
|
$
|
623,755
|
|
|
$
|
588,279
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
5,187
|
|
|
$
|
6,962
|
|
Accrued salaries and benefits
|
|
11,857
|
|
|
14,840
|
|
Other accrued liabilities
|
|
14,325
|
|
|
12,856
|
|
Total current liabilities
|
|
31,369
|
|
|
34,658
|
|
Long-term liabilities:
|
|
|
|
|
|
Convertible notes, long-term
|
|
117,949
|
|
|
115,089
|
|
Long-term imputed financing obligation
|
|
38,874
|
|
|
39,063
|
|
Other long-term liabilities
|
|
10,818
|
|
|
7,847
|
|
Total long-term liabilities
|
|
167,641
|
|
|
161,999
|
|
Total stockholders' equity
|
|
424,745
|
|
|
391,622
|
|
Total liabilities and stockholders' equity
|
|
$
|
623,755
|
|
|
$
|
588,279
|
|
|
|
|
|
|
|
|
|
|
Rambus Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Royalties
|
|
$
|
62,387
|
|
|
$
|
69,741
|
|
|
$
|
129,350
|
|
|
$
|
143,378
|
|
|
Contract and other revenue
|
|
10,425
|
|
|
6,777
|
|
|
16,376
|
|
|
11,428
|
|
|
Total revenue
|
|
72,812
|
|
|
76,518
|
|
|
145,726
|
|
|
154,806
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
Cost of revenue (1)
|
|
12,137
|
|
|
10,637
|
|
|
22,893
|
|
|
20,659
|
|
|
Research and development (1)
|
|
29,188
|
|
|
27,668
|
|
|
57,722
|
|
|
54,566
|
|
|
Sales, general and administrative (1)
|
|
17,339
|
|
|
18,619
|
|
|
35,841
|
|
|
37,439
|
|
|
Gain from sale of intellectual property
|
|
(896
|
)
|
|
—
|
|
|
(3,156
|
)
|
|
(170
|
)
|
|
Gain from settlement
|
|
(510
|
)
|
|
(510
|
)
|
|
(1,020
|
)
|
|
(1,020
|
)
|
|
Restructuring charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
Total operating costs and expenses
|
|
57,258
|
|
|
56,414
|
|
|
112,280
|
|
|
111,513
|
|
|
Operating income
|
|
15,554
|
|
|
20,104
|
|
|
33,446
|
|
|
43,293
|
|
|
Interest income and other income (expense), net
|
|
203
|
|
|
104
|
|
|
335
|
|
|
117
|
|
|
Interest expense
|
|
(3,091
|
)
|
|
(8,770
|
)
|
|
(6,174
|
)
|
|
(18,696
|
)
|
|
Interest and other income (expense), net
|
|
(2,888
|
)
|
|
(8,666
|
)
|
|
(5,839
|
)
|
|
(18,579
|
)
|
|
Income before income taxes
|
|
12,666
|
|
|
11,438
|
|
|
27,607
|
|
|
24,714
|
|
|
Provision for income taxes
|
|
5,805
|
|
|
6,395
|
|
|
11,244
|
|
|
11,867
|
|
|
Net income
|
|
$
|
6,861
|
|
|
$
|
5,043
|
|
|
$
|
16,363
|
|
|
$
|
12,847
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
$
|
0.14
|
|
|
$
|
0.11
|
|
|
Diluted
|
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
$
|
0.14
|
|
|
$
|
0.11
|
|
|
Weighted average shares used in per share calculation
|
|
|
|
|
|
|
|
|
|
Basic
|
|
116,027
|
|
|
114,116
|
|
|
115,683
|
|
|
113,854
|
|
|
Diluted
|
|
120,939
|
|
|
117,398
|
|
|
119,225
|
|
|
116,733
|
|
|
|
|
|
|
|
|
_________
(1) Total stock-based compensation expense for the three and six
months ended June 30, 2015 and 2014 are presented as follows:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Cost of revenue
|
|
$
|
27
|
|
|
$
|
15
|
|
|
$
|
39
|
|
|
$
|
22
|
|
Research and development
|
|
$
|
1,988
|
|
|
$
|
2,615
|
|
|
$
|
3,755
|
|
|
$
|
3,926
|
|
Sales, general and administrative
|
|
$
|
2,400
|
|
|
$
|
2,225
|
|
|
$
|
4,387
|
|
|
$
|
3,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rambus Inc.
Supplemental Reconciliation of GAAP to Non-GAAP Results
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30, 2015
|
|
March 31, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
$
|
57,258
|
|
|
$
|
55,022
|
|
|
$
|
56,414
|
|
|
$
|
112,280
|
|
|
$
|
111,513
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
(4,415
|
)
|
|
(3,766
|
)
|
|
(4,855
|
)
|
|
(8,181
|
)
|
|
(7,754
|
)
|
|
Acquisition-related transaction costs and retention bonus expense
|
|
—
|
|
|
(2
|
)
|
|
(1,028
|
)
|
|
(2
|
)
|
|
(2,463
|
)
|
|
Amortization expense
|
|
(6,323
|
)
|
|
(6,323
|
)
|
|
(6,757
|
)
|
|
(12,646
|
)
|
|
(13,554
|
)
|
|
Restructuring charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
Non-GAAP operating costs and expenses
|
|
$
|
46,520
|
|
|
$
|
44,931
|
|
|
$
|
43,774
|
|
|
$
|
91,451
|
|
|
$
|
87,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
15,554
|
|
|
$
|
17,892
|
|
|
$
|
20,104
|
|
|
$
|
33,446
|
|
|
$
|
43,293
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
4,415
|
|
|
3,766
|
|
|
4,855
|
|
|
8,181
|
|
|
7,754
|
|
|
Acquisition-related transaction costs and retention bonus expense
|
|
—
|
|
|
2
|
|
|
1,028
|
|
|
2
|
|
|
2,463
|
|
|
Amortization expense
|
|
6,323
|
|
|
6,323
|
|
|
6,757
|
|
|
12,646
|
|
|
13,554
|
|
|
Restructuring charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
Non-GAAP operating income
|
|
$
|
26,292
|
|
|
$
|
27,983
|
|
|
$
|
32,744
|
|
|
$
|
54,275
|
|
|
$
|
67,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
$
|
12,666
|
|
|
$
|
14,941
|
|
|
$
|
11,438
|
|
|
$
|
27,607
|
|
|
$
|
24,714
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
4,415
|
|
|
3,766
|
|
|
4,855
|
|
|
8,181
|
|
|
7,754
|
|
|
Acquisition-related transaction costs and retention bonus expense
|
|
—
|
|
|
2
|
|
|
1,028
|
|
|
2
|
|
|
2,463
|
|
|
Amortization expense
|
|
6,323
|
|
|
6,323
|
|
|
6,757
|
|
|
12,646
|
|
|
13,554
|
|
|
Restructuring charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
Non-cash interest expense on convertible notes
|
|
1,581
|
|
|
1,559
|
|
|
5,469
|
|
|
3,140
|
|
|
11,711
|
|
|
Non-GAAP income before income taxes
|
|
$
|
24,985
|
|
|
$
|
26,591
|
|
|
$
|
29,547
|
|
|
$
|
51,576
|
|
|
$
|
60,235
|
|
|
GAAP provision for income taxes
|
|
5,805
|
|
|
5,439
|
|
|
6,395
|
|
|
11,244
|
|
|
11,867
|
|
|
Adjustment to GAAP provision for income taxes
|
|
3,190
|
|
|
4,134
|
|
|
4,242
|
|
|
7,324
|
|
|
9,818
|
|
|
Non-GAAP provision for income taxes
|
|
8,995
|
|
|
9,573
|
|
|
10,637
|
|
|
18,568
|
|
|
21,685
|
|
|
Non-GAAP net income
|
|
$
|
15,990
|
|
|
$
|
17,018
|
|
|
$
|
18,910
|
|
|
$
|
33,008
|
|
|
$
|
38,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net income per share
|
|
$
|
0.14
|
|
|
$
|
0.15
|
|
|
$
|
0.17
|
|
|
$
|
0.29
|
|
|
$
|
0.34
|
|
|
Non-GAAP diluted net income per share
|
|
$
|
0.13
|
|
|
$
|
0.14
|
|
|
$
|
0.16
|
|
|
$
|
0.28
|
|
|
$
|
0.33
|
|
|
Weighted average shares used in non-GAAP per share calculation:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
116,027
|
|
|
115,336
|
|
|
114,116
|
|
|
115,683
|
|
|
113,854
|
|
|
Diluted
|
|
120,939
|
|
|
117,442
|
|
|
117,398
|
|
|
119,225
|
|
|
116,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Reconciliation of GAAP to Non-GAAP Effective Tax
Rate (1)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30, 2015
|
|
March 31, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective tax rate
|
|
46
|
%
|
|
36
|
%
|
|
56
|
%
|
|
41
|
%
|
|
48
|
%
|
|
Adjustment to GAAP effective tax rate
|
|
(10
|
)%
|
|
—
|
%
|
|
(20
|
)%
|
|
(5
|
)%
|
|
(12
|
)%
|
|
Non-GAAP effective tax rate
|
|
36
|
%
|
|
36
|
%
|
|
36
|
%
|
|
36
|
%
|
|
36
|
%
|
|
|
|
|
(1)
|
For purposes of internal forecasting, planning and analyzing future
periods that assume net income from operations, the Company
estimates a fixed, long-term projected tax rate of approximately 36
percent, which consists of estimated U.S. federal and state tax
rates, and excludes tax rates associated with certain items such as
withholding tax, tax credits and deferred tax asset valuation
allowance. Accordingly, the Company has applied the 36 percent tax
rate to its non-GAAP financial results for all periods to assist the
Company's planning for future periods.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150720006314/en/
Rambus Inc.
Linda Ashmore, 408-462-8411
Corporate
Communications
lashmore@rambus.com
or
Rambus
Inc.
Nicole Noutsios, 408-462-8050
Investor Relations
nnoutsios@rambus.com
Source: Rambus Inc.
News Provided by Acquire Media