"We are pleased with the results for the fourth quarter. We achieved record revenue and finished the year by signing an important patent licensing agreement with AMD for which payments will begin in 2006," said Harold Hughes, president and chief executive officer at Rambus. "We built a strong foundation this past year with achievements that demonstrate the value of our technology and give us a solid start to the new year."
Fourth quarter results reflected $6.9 million in contract revenues, up 14.3% over the fourth quarter last year and down 13.5% from the previous quarter. The sequential decrease reflects timing of deliverables under certain memory and serial link technology development contracts. Fourth quarter results include $34.7 million in royalties, up 6.5% over the fourth quarter last year and up 23.7% from the previous quarter. The sequential increase in royalties is primarily due to the first quarterly royalty payment of $5.9 million from Infineon under the license agreement announced in March 2005.
Total costs and expenses for the fourth quarter of 2005 were $34.3 million compared with $29.0 million in the fourth quarter last year and $32.1 million last quarter. Research and development expense, and marketing, general and administrative expenses, increased $3.4 million and $1.8 million respectively, compared with the fourth quarter of 2004. The increase in research and development expense reflects investment in research and development capability in the United States and Bangalore, while the increase in marketing, general and administrative expenses is a reflection of our commitment to a strong sales presence and a strong infrastructure to support our business as it grows.
Rambus reported a pre-tax gain of $5.4 million on the repurchase of $35 million face value of its zero coupon convertible notes during the quarter. The notes were repurchased for a total of $29 million in cash. Primarily as a result of the repurchase of the notes and the repurchase of approximately one million shares of common stock for $13 million, cash equivalents and marketable securities declined from $388 million as of September 30, 2005 to $355 million at year-end.
The earnings announcement call will be broadcast live on our website ( www.rambus.com) at 2:00 p.m. PST today. Please log-on early if you do not already have the necessary software to listen to the call.
The conference call replay number is 888-203-1112 and the ID number is 4466070. For international callers, the number is 719-457-0820. The replay will be available on our website beginning at 5:00 p.m. PST today.
About Rambus
Rambus is one of the world's premier technology licensing companies specializing in the invention and design of high-speed chip interfaces. Since its founding in 1990, the company's innovations, breakthrough technologies and integration expertise have helped industry-leading chip and system companies solve their most challenging and complex I/O problems and bring their products to market. Rambus' interface solutions can be found in numerous computing, consumer, and communications products and applications. Rambus is headquartered in Los Altos, California, with regional offices in Chapel Hill, North Carolina; Taipei, Taiwan; Tokyo, Japan and Bangalore, India. Additional information is available at www.rambus.com.
This release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, including our CEO's statements regarding prospects for 2006. Such forward-looking statements are based on current expectations, estimates and projections about the Company's industry, management's beliefs, and certain assumptions made by the Company's management. Actual results may differ materially. Among the reasons which could cause actual results to differ materially are the uncertainty of realizing any benefits in the new year from activities during 2005. Our business generally is subject to a number of risks which are described more fully in our SEC filings including our 10-K and 10-Qs.
RAMBUS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
------------------ ----------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2005 2005 2004 2005 2004
-------- --------- -------- -------- --------
Revenues:
Contract revenues $6,904 $ 7,983 $6,038 $26,876 $24,742
Royalties 34,685 28,031 32,571 130,322 120,132
-------- --------- -------- -------- --------
Total revenues 41,589 36,014 38,609 157,198 144,874
-------- --------- -------- -------- --------
Costs and expenses:
Cost of contract
revenues 4,742 4,455 5,512 19,766 20,246
Research and
development 11,848 10,598 8,430 40,972 32,627
Marketing, general
& administrative 9,422 8,135 7,608 36,416 29,427
Litigation expense 8,265 8,898 7,470 38,282 23,057
-------- --------- -------- -------- --------
Total costs and
expenses 34,277 32,086 29,020 135,436 105,357
-------- --------- -------- -------- --------
Operating income 7,312 3,928 9,589 21,762 39,517
Interest and other
income, net 8,084 21,202 916 34,830 8,368
-------- --------- -------- -------- --------
Income before income
taxes 15,396 25,130 10,505 56,592 47,885
Provision for income
taxes 6,015 10,634 3,962 22,915 14,326
-------- --------- -------- -------- --------
Net income $9,381 $14,496 $6,543 $33,677 $33,559
======== ========= ======== ======== ========
Net income per share
- basic $ 0.09 $ 0.15 $ 0.06 $ 0.34 $ 0.33
======== ========= ======== ======== ========
Net income per share
- diluted $ 0.09 $ 0.14 $ 0.06 $ 0.32 $ 0.30
======== ========= ======== ======== ========
Shares used in per
share calculations:
Basic 99,688 99,944 102,380 99,876 101,931
Diluted 103,561 103,211 109,017 103,993 110,050
RAMBUS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
Dec. 31, Sept. 30, Dec. 31,
2005 2005 2004
---------- ---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 42,391 $ 56,144 $ 48,310
Marketable securities 118,416 88,973 89,483
Accounts receivable, net 954 1,329 1,435
Prepaid and deferred taxes 4,219 13,703 13,861
Prepaids and other
current assets 4,235 5,168 4,094
---------- ---------- ----------
Total current assets 170,215 165,317 157,183
---------- ---------- ----------
Marketable securities,
long-term 194,583 242,906 98,567
Restricted investments 2,279 2,274 5,067
Deferred taxes, long-term 68,626 63,387 75,295
Purchased intangible assets,
net 23,650 22,294 21,765
Property and equipment, net 18,898 20,542 17,578
Goodwill, net 3,315 3,315 581
Other assets 3,953 4,895 688
---------- ---------- ----------
Total assets $485,519 $524,930 $376,724
========== ========== ==========
Total cash, cash equivalents
and marketable securities $355,390 $388,023 $236,360
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and other
current liabilities $ 19,634 $ 19,415 $ 17,444
Deferred revenue 973 4,963 19,271
---------- ---------- ----------
Total current liabilities 20,607 24,378 36,715
Notes payable 160,000 195,000 --
Deferred revenue, less
current portion 8,317 7,905 4,552
Other long-term liabilities 1,592 1,991 --
---------- ---------- ----------
Total liabilities 190,516 229,274 41,267
---------- ---------- ----------
Stockholders' equity:
Common Stock 99 100 103
Additional paid-in capital 327,524 331,499 341,080
Accumulated other
comprehensive gain (loss) (1,647) (1,562) (878)
Accumulated deficit (30,973) (34,381) (4,848)
---------- ---------- ----------
Total stockholders'
equity 295,003 295,656 335,457
---------- ---------- ----------
Total liabilities and
stockholders' equity $485,519 $524,930 $376,724
========== ========== ==========
Contact:
Rambus Inc. Bob Eulau, 650-947-5000 (Sr. VP, Finance & CFO) Nicole Noutsios, 650-947-5050 (Investor Relations)