Rambus Reports Third Quarter Financial Results

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.

On occasion 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. As a company of inventors, Rambus focuses on the development of technologies that enrich 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)

               

 

September 30,

2011

December 31,

2010

ASSETS
 
Current assets:
Cash and cash equivalents $ 160,844 $ 215,262
Marketable securities 131,909 296,747
Accounts receivable 917 2,600
Prepaids and other current assets 10,101 10,898
Deferred taxes   1,863   2,420
Total current assets 305,634 527,927
Deferred taxes, long-term 7,190 2,974
Intangible assets, net 189,363 40,986
Goodwill 115,148 18,154
Property, plant and equipment, net 72,494 67,770
Other assets   5,640   5,361
Total assets $ 695,469 $ 663,172
 
LIABILITIES, CONTINGENTLY REDEEMABLE COMMON STOCK & STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 18,117 $ 5,952
Accrued salaries and benefits 27,488 31,634
Accrued litigation expenses 9,830 4,060
Deferred revenue 762 2,482
Other accrued liabilities   10,132   11,683
Total current liabilities 66,329 55,811
Long-term liabilities:
Convertible notes, long-term 130,354 121,500
Long-term imputed financing obligation 36,386 27,899
Other long-term liabilities   13,440   9,679
Total long-term liabilities   180,180   159,078
Contingently redeemable common stock     113,500
Total stockholders’ equity   448,960   334,783
Total liabilities, contingently redeemable common stock and stockholders’ equity $ 695,469 $ 663,172
               

Rambus Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

  2011         2010     2011         2010  
 
Revenue:
Royalties $ 96,216 $ 31,179 $ 216,421 $ 229,913
Contract revenue   4,047     564     12,583     2,556  
Total revenue   100,263     31,743     229,004     232,469  
Operating costs and expenses:
Cost of revenue (1) 7,425 1,368 16,632 5,026
Research and development (1) 32,318 23,002 79,855 67,678
Marketing, general and administrative (1) 48,952 27,938 119,416 88,873
Costs of restatement and related legal activities 832 1,229 2,703 3,393
Gain from settlement       (10,300 )   (6,200 )   (116,500 )
Total operating costs and expenses   89,527     43,237     212,406     48,470  
Operating income (loss) 10,736 (11,494 ) 16,598 183,999
Interest income and other income (expense), net (768 ) 312 (2,197 ) 1,053
Interest expense on convertible notes   (5,410 )   (4,953 )   (15,794 )   (14,709 )
Interest and other income (expense), net   (6,178 )   (4,641 )   (17,991 )   (13,656 )
Income (loss) before income taxes 4,558 (16,135 ) (1,393 ) 170,343
Provision for income taxes   4,080     4,441     12,944     52,510  
Net income (loss) $ 478   $ (20,576 ) $ (14,337 ) $ 117,833  
Net income (loss) per share:
Basic $ 0.00   $ (0.18 ) $ (0.13 ) $ 1.04  
Diluted $ 0.00   $ (0.18 ) $ (0.13 ) $ 1.01  
Weighted average shares used in per share calculation
Basic   112,334     111,866     109,997     112,768  
Diluted   115,552     111,866     109,997     116,347  

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