Ramtron Reports Fourth-Quarter and Full-Year 2005 Financial Results; Core FRAM Products Achieve Record Quarterly Sales

COLORADO SPRINGS, Colo.—(BUSINESS WIRE)—Feb. 16, 2006— U.S. semiconductor maker Ramtron International Corporation (Nasdaq: RMTR), a leading developer and supplier of nonvolatile ferroelectric random access memory (FRAM) and integrated semiconductor products, today reported its financial results for the fourth quarter and full year ended December 31, 2005. Fourth-quarter income from continuing operation was $26,000, or $0.00 per diluted share, compared with income from continuing operation of $232,000, or $0.01 per diluted share, for the same quarter of the prior year. Revenue for the fourth quarter totaled $8.9 million, compared with $9.4 million for the same quarter of 2004.

As reported under U.S. generally accepted accounting principles (GAAP), full-year net loss from continuing operation was $2.5 million, or a loss of $0.11 per diluted share, compared with income from continuing operation of $3.5 million, or $0.14 per diluted share, for the prior year. Full-year 2005 results included charges of $1.6 million related to the retirement of the company's fixed-rate convertible debentures, $1.1 million related to the acquisition of Goal Semiconductor, and a first-quarter inventory write-off of $872,000.

Excluding the effects of these charges of $3.6 million, 2005 non-GAAP full-year adjusted net income before interest, taxes, depreciation and amortization (adjusted EBITDA) was $3.3 million or $0.14 per share, based on 23.1 million weighted average shares outstanding (basic). (See the section of this release entitled "Non-GAAP Financial Measures" and the attached table for discussion of this adjusted EBITDA measure, and reconciliations of this measure to the comparable GAAP measure.)

"We believe that 2005 adjusted EBITDA of $3.3 million better reflects the operating results of the company," said Eric Balzer, Ramtron CFO. "Many of these unusual charges were a result of strategic decisions that were made to streamline the company and position it for growth."

For the full year ended December 31, 2005, Ramtron's revenue was $34.4 million, compared with $39.5 million for 2004. The year-over-year revenue decline was due to an anticipated $12.1 million decline in ENEL product revenue, which was partially offset by growth of $7.5 million in non-ENEL, or core FRAM, product revenue. ENEL (Ente Nazionale per l'Energia Elettrica SpA, (NYSE:EN)) is a leading utility company in Italy and has been a significant Ramtron customer for FRAM products since 2002.

"Our core FRAM product business set quarterly sales records every quarter this year, leading to 37% growth for full-year 2005," commented Bill Staunton, Ramtron's CEO. "In 2006, our goal is to grow core FRAM revenue by 30% to 35%, which would result in overall product revenue growth of 15% to 20% for the year despite the continued wind down of revenue in our ENEL program."
Five-year ENEL and Core FRAM revenue history ($ in millions)

                         2001   2002   2003   2004   2005  Growth Rate
                        ------ ------ ------ ------ ----- ------------
Core FRAM               $ 2.4  $ 5.9  $ 9.9  $20.0  $27.5      63%
ENEL                    $ 2.2  $16.3  $15.9  $17.2  $ 5.2

Fourth-Quarter FRAM Semiconductor Product Highlights:

-- Total product revenue was $8.6 million, up 2% from the prior quarter and down 3% from the year-ago quarter

-- Core FRAM product sales, which exclude sales to ENEL, increased 7% from the prior quarter and 52% from the year-ago quarter to $7.7 million, or 90% of total FRAM product revenue; core FRAM product sales were $5.0 million, or 57% of total FRAM product revenue, for the fourth quarter of 2004

-- Sales to ENEL declined 24% from the prior quarter and 77% from the year-ago quarter to $888,000, or 10% of total FRAM product revenue; ENEL sales were $3.8 million, or 43% of FRAM product revenue, for the fourth quarter of 2004

-- Integrated product revenue, which is currently comprised of the company's FRAM-based Processor Companion products, was $1.4 million, up 106% from the prior quarter and 637% from the year ago quarter; integrated product revenue comprised 18% of core FRAM product revenue during the fourth quarter of 2005, compared with 4% for the fourth quarter of 2004

-- Gross margin for all FRAM semiconductor products was 49%, compared with 53% for the prior quarter and 55% for the fourth quarter of 2004.

Full-Year 2005 Highlights:

-- Twelve-month core FRAM product sales, which exclude sales to ENEL, grew 37% over full-year 2004

-- Twelve-month ENEL sales declined 70% from 2004 to $5.2 million, which was the major contributor to an overall 12% decline in total FRAM product sales from 2004

-- In 2005, 9% of FRAM product revenue was generated by integrated products, up from 4% percent in 2004

-- FRAM gross margin, excluding provision for inventory write-off and warranty charge, decreased 3% from 2004 to 51%, due primarily to lower yields on newly introduced products.

Staunton noted, "Our integrated product line gained significant traction with a 106% increase over the third quarter of 2005. In response to anticipated demand, we are planning to introduce four new integrated products this year including more processor companions and microcontrollers with integrated FRAM data memory."

Business Outlook

The following statements are based on Ramtron's current expectations. These statements are forward-looking, and actual results may differ materially from those set forth in these statements.

-- Revenue for the first quarter ending March 31, 2006 is currently anticipated to be between $8.2 million and $8.7 million

-- Gross margin for the first quarter is currently anticipated to be between 48% and 52%; operating expenses are expected to be between $4.8 million and $5.2 million

-- Other revenue for the first quarter, including license and development fees, royalties and customer-sponsored research and development, is expected to total approximately $400,000

-- For full-year 2006, the company expects to record an EBITDA profit as adjusted for stock option expense, primarily as a result of an anticipated overall product revenue increase of 15% to 20% over 2005. This percentage increase includes the effect of the final wind down of sales to ENEL, which are anticipated to be approximately $1.2 million to $2.0 million for 2006, compared with $5.2 million for 2005.

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