Rambus Reports Third Quarter Financial Results (Revenue down 30%)

LOS ALTOS, Calif.—(BUSINESS WIRE)—October 23, 2008— Rambus Inc. (NASDAQ:RMBS), one of the worlds premier technology licensing companies specializing in high-speed memory architectures, today reported financial results for the third quarter of 2008.

 

Revenues for the third quarter of 2008 were $29.4 million, down 17.6% sequentially from the second quarter and down 29.5% over the third quarter of last year. Revenues for the nine months ended September 30, 2008 were $104.9 million, down 24.8% over the same period of last year.

With the FTC restrictions on our royalties removed and annual savings of $17 million expected through our restructuring efforts, we are confident in our ability to pursue our strategic objectives, said Harold Hughes, president and chief executive officer at Rambus. Foremost among these is our steadfast commitment to investments in breakthrough technology, and efforts to protect and be fully compensated for our patented inventions.

Total costs and expenses for the third quarter of 2008 were $60.0 million, which included $9.0 million of stock-based compensation expenses, $4.0 million of restructuring related expenses, $2.2 million of asset impairment expenses and $0.4 million for the previous stock-based compensation restatement and related legal expenses. This is compared to total costs and expenses of $52.6 million for the second quarter of 2008, which included $9.0 million of stock-based compensation expenses and $2.3 million of restatement and related legal expenses. General litigation expenses for the third quarter of 2008 were $15.7 million, an increase of $6.6 million from the second quarter of 2008.

As compared to the third quarter of last year, total costs and expenses increased from $58.2 million, which included $8.7 million of stock-based compensation expenses and $4.2 million of restatement and related legal expenses. General litigation expenses in the third quarter of 2008 increased $4.0 million from the third quarter of 2007.

Total costs and expenses for the nine months ended September 30, 2008 were $175.6 million, which included $28.5 million of stock-based compensation expenses, $4.0 million of restructuring-related expenses, $2.2 million of asset impairment expenses and $3.6 million for the previous stock-based compensation restatement and related legal expenses. This is compared to total costs and expenses of $177.5 million for the same period of 2007, which included $28.4 million of stock-based compensation expenses and $18.6 million of restatement and related legal expenses. General litigation expenses for the nine months ended September 30, 2008 were $38.0 million, an increase of $14.7 million from the same period in 2007.

Net loss for the third quarter of 2008 was $27.9 million compared to a net loss of $144.7 million in the second quarter of 2008 and a net loss of $6.5 million in the third quarter of 2007. Net loss per share for the third quarter of 2008 was $0.27 as compared to a net loss per share of $1.38 in the second quarter of 2008 and a net loss per share of $0.06 for the third quarter of 2007. Net loss for the nine months ended September 30, 2008 was $185.2 million as compared to a net loss of $13.1 million for the same period of 2007. Net loss per share for the nine months ended September 30, 2008 was $1.77 as compared to a net loss per share of $0.13 in the same period of 2007.

Cash, cash equivalents and marketable securities as of September 30, 2008 were $379.0 million, down approximately $15.2 million from June 30, 2008 and down approximately $61.9 million from December 31, 2007. During the third quarter of 2008, the Company repurchased approximately 0.6 million shares of common stock for an aggregate value of $10.0 million. During the first nine months of the year, the Company repurchased approximately 2.0 million shares of common stock for an aggregate value of $34.9 million and also paid out a net of $13.3 million related to the settlement of a class action lawsuit related to the timing of past stock option grants.

The conference call discussing third quarter results will be webcast live via the Rambus Investor Relations website ( http://investor.rambus.com) at 2:00 p.m. Pacific Time today. A replay will be available following the call on Rambus Investor Relations website and for one week at the following numbers: (888) 203-1112 (domestic) or (719) 457-0820 (international) with ID# 5134540.

About Rambus Inc.

Rambus is one of the worlds premier technology licensing companies specializing in the invention and design of high-speed memory architectures. Additional information is available at www.rambus.com.

RMBSFN

Press Release Financials

Rambus

4440 El Camino Real
Los Altos, CA 94022
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, December 31,
2008 2007

ASSETS

Current assets:
Cash and cash equivalents $ 106,786 $ 119,391
Marketable securities 272,186 321,491
Accounts receivable 1,740 442
Unbilled receivables 690 1,478
Prepaids and other current assets 8,141 8,349
Deferred taxes 222 11,595
Total current assets 389,765 462,746
Restricted cash 1,238 2,286
Deferred taxes, long-term 2,613 116,209
Intangible assets, net 8,040 13,441
Property and equipment, net 23,672 24,587
Goodwill 4,454 4,454
Other non-current assets 4,791 3,624
Total assets $ 434,573 $ 627,347

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 9,091 $ 11,283
Accrued payroll and related benefits 9,478 9,985
Accrued litigation expenses 13,636 26,234
Other accrued liabilities 5,467 5,894
Deferred revenue 2,329 2,756
Total current liabilities 40,001 56,152
Long-term liabilities:
Convertible notes 160,000 160,000
Other long-term liabilities 3,824 4,111
Total long-term liabilities 163,824 164,111
Total stockholders' equity: 230,748 407,084
Total liabilities and stockholders' equity $ 434,573 $ 627,347
Press Release Financials

Rambus

4440 El Camino Real
Los Altos, CA 94022
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2008 2007 2008 2007
Revenue:
Royalty revenue $ 25,793 $ 35,327 $ 91,174 $ 118,263
Contract revenue 3,635 6,388 13,707 21,145
Total revenues 29,428 41,715 104,881 139,408
Costs and expenses:
Cost of contract revenues (1) 4,611 5,781 18,411 18,878
Research and development (1) 17,511 18,312 59,048 60,339
Marketing, general and administrative (1) 31,288 29,914 88,377 79,657
Restructuring costs (1) 4,024 - 4,024 -
Impairment of asset 2,158 - 2,158 -
Costs of restatement and related legal activities 392 4,169 3,564 18,631
Total costs and expenses 59,984 58,176 175,582 177,505
Operating loss (30,556 ) (16,461 ) (70,701 ) (38,097 )
Interest and other income, net 2,704 5,645 10,207 16,496
Loss before income taxes (27,852 ) (10,816 ) (60,494 ) (21,601 )
Provision for (benefit from) income taxes 92 (4,318 ) 124,748 (8,495 )
Net loss $ (27,944 ) $ (6,498 ) $ (185,242 ) $ (13,106 )
Net loss per share:
Basic $ (0.27 ) $ (0.06 ) $ (1.77 ) $ (0.13 )
Diluted $ (0.27 ) $ (0.06 ) $ (1.77 ) $ (0.13 )
Weighted-Average Shares used in computing per share amounts:
Basic 104,897 103,820 104,795 103,820
Diluted 104,897 103,820 104,795 103,820
(1) Total stock-based compensation expense for the three and nine month periods ended September 30, 2008 and September 30, 2007 are presented as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2008 2007 2008 2007
Cost of contract revenues $ 1,321 $ 1,333 $ 4,604 $ 4,069
Research and development 3,326 3,190 10,997 9,821
Marketing, general and administrative 4,371 4,138 12,899 14,512
Restructuring costs 547 - 547 -

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