Earnings per share of 5 cents;
Los Altos, California, United States
– 07/14/2005
Rambus Inc. (Nasdaq: RMBS), one of the world’s
premier technology licensing companies specializing in high-speed
chip interfaces, today reported financial results for the second
quarter of 2005. Earnings per share for the quarter were 5 cents,
compared to 8 cents in the second quarter last year and 4 cents
in the previous quarter. Net income for the second quarter was
$5.4 million (13% of revenue), compared to $8.3 million in the
second quarter last year and $4.4 million in the previous
quarter. Revenues for the second quarter were $40.0 million, up
14% over the second quarter last year and up 1% from the previous
quarter.
We are pleased to report record revenues
for the second consecutive quarter. The second half of the year
is a challenge to forecast given the number of patent license
agreements and renewals we are currently negotiating. We remain
committed to signing agreements that generate long-term
value, said Harold Hughes, Chief Executive Officer
at Rambus. We have taken important and
necessary actions to protect our intellectual property while we
work on patent license renewals. We are very encouraged by the
growing interest we are seeing in our advanced high-speed
interface designs, particularly in our
XDRtm memory interface as well as the
momentum we are seeing with our PCI Express
solutions.
Second quarter results reflected $5.4 million in contract
revenues, up 1% over the second quarter last year and down 18%
from the previous quarter. This sequential decline in contract
revenue was a result of less revenue from contracts for XDR
memory interfaces and FlexIOtm as we
near the completion of initial contracts associated with the cell
processor and XDR DRAM. Second quarter results include $34.6
million in royalties, up 17% over the second quarter last year
and up 5% from the previous quarter. The increase in royalties
primarily reflects an increase in SDRAM and DDR royalties
relative to both periods.
Total costs and expenses were $34.4 million compared with
$24.4 million in the second quarter last year and $34.7 million
last quarter. $5.2 million of the increase over the second
quarter of last year was due to litigation expense. The remaining
increases were primarily related to increased costs in
engineering and administration.
The tax rate for the second quarter is 40.6% which is up from
37% in the first quarter due to a forecasted tax rate for 2005 of
39%. The two primary drivers of this increase in the tax rate are
our forecast for earnings before income tax and stock-based
compensation expense which is not deductible for income tax
purposes.
Cash, cash equivalents and marketable securities increased
from $460 million to $471 million since March 31, 2005. The
increase in cash was primarily attributable to cash generated by
operations.
The earnings announcement call will be broadcast live on our
website (www.rambus.com) at 2:00 p.m. PDT today. To experience
the audio of the Q2 Webcast, you need sound capabilities on your
personal computer and installation of RealPlayer or Windows Media
Player. These features are available at no cost.
The conference call replay number is 888-203-1112 and the ID
number is 5462558. For international callers, the number is
719-457-0820. The replay will be available on our website
beginning at 5:00 p.m. PDT today.
About Rambus Inc.
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’s interface solutions can be
found in numerous computing, consumer, and communications
products and applications. Rambus is headquartered in Los Altos,
Calif., with regional offices in Bangalore, India, Chapel Hill,
North Carolina, Taipei, Taiwan and Tokyo, Japan. Additional
information is available at www.rambus.com.
| Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) |
|||
| Three Months Ended | |||
| June 30, 2005 | March 31, 2005 | June 30, 2004 | |
| Revenues: | |||
| Contract revenues | $ 5,390 | $ 6,600 | $ 5,349 |
| Royalties | 34,595 | 33,011 | 29,616 |
| Total revenues | 39,985 | 39,611 | 34,965 |
| Costs and expenses: | |||
| Cost of contract revenues | 4,965 | 5,603 | 4,957 |
| Research and development | 9,934 | 8,591 | 7,929 |
| Marketing, general & administrative | 9,502 | 9,358 | 6,724 |
| Litigation expense | 9,980 | 11,140 | 4,747 |
| Total costs and expenses | 34,381 | 34,692 | 24,357 |
| Operating income | 5,604 | 4,919 | 10,608 |
| Interest and other income, net | 3,414 | 2,129 | 2,199 |
| Income before income taxes | 9,018 | 7,048 | 12,807 |
| Provision for income taxes | 3,658 | 2,608 | 4,483 |
| Net income | $ 5,360 | $ 4,440 | $ 8,324 |
| Net income per share – basic | $ 0.05 | $ 0.04 | $ 0.08 |
| Net income per share – diluted | $ 0.05 | $ 0.04 | $ 0.08 |
| Shares used in per share calculations: |
|||
| Basic | 99,596 | 100,280 | 102,500 |
| Diluted | 103,675 | 105,913 | 109,850 |
| Six Months Ended | ||
| June 30, 2005 | June 30, 2004 | |
| Revenues: | ||
| Contract revenues | $ 11,990 | $ 10,428 |
| Royalties | 67,606 | 57,078 |
| Total revenues | 79,596 | 67,506 |
| Costs and expenses: | ||
| Cost of contract revenues | 10,568 | 10,191 |
| Research and development | 18,525 | 15,356 |
| Marketing, general & administrative | 18,860 | 13,754 |
| Litigation expense | 21,120 | 8,925 |
| Total costs and expenses | 69,073 | 48,226 |
| Operating income | 10,523 | 19,280 |
| Interest and other income, net | 5,543 | 6,303 |
| Income before income taxes | 16,066 | 25,583 |
| Provision for income taxes | 6,266 | 8,954 |
| Net income | $ 9,800 | $ 16,629 |
| Net income per share – basic | $ 0.10 | $ 0.16 |
| Net income per share – diluted | $ 0.09 | $ 0.15 |
| Shares used in per share calculations: |
||
| Basic | 99,936 | 101,733 |
| Diluted | 104,693 | 110,560 |
| Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
|||
| June 30, 2005 | March 31, 2005 | December 31, 2004 | |
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 69,929 | $ 208,021 | $ 48,310 |
| Marketable securities | 101,470 | 96,802 | 89,483 |
| Accounts receivable | 1,667 | 3,596 | 1,435 |
| Prepaid and deferred taxes | 13,703 | 13,710 | 13,861 |
| Prepaids and other current assets | 5,481 | 4,009 | 4,094 |
| Total current assets | 192,250 | 326,138 | 157,183 |
| Property and equipment, net | 21,756 | 18,130 | 17,578 |
| Marketable securities, long-term |
299,325 | 155,360 | 98,567 |
| Restricted investments | 2,302 | 5,076 | 5,067 |
| Deferred taxes, long-term | 72,587 | 74,507 | 75,295 |
| Purchased intangible assets, net |
23,437 | 20,844 | 21,765 |
| Other assets | 10,744 | 8,418 | 1,269 |
| Total assets | $ 622,401 | $ 608,473 | $ 376,724 |
| Total cash, cash equivalents, and marketable securities |
$ 470,724 | $ 460,183 | $ 236,360 |
| Liabilities And Stockholders’ Equity |
|||
| Current liabilities: | |||
| Accounts payable and other current liabilities |
$ 24,811 | $ 21,671 | $ 17,444 |
| Deferred revenue | 8,035 | 13,447 | 19,271 |
| Total current liabilities | 32,846 | 35,118 | 36,715 |
| Notes payable | 300,000 | 300,000 | – |
| Deferred revenue, less current portion |
6,630 | 5,314 | 4,552 |
| Other long-term liabilities | 1,992 | – | – |
| Total liabilities | 341,468 | 340,432 | 41,267 |
| Stockholders’ equity: | |||
| Common Stock | 100 | 99 | 103 |
| Additional paid-in capital | 331,005 | 325,344 | 341,080 |
| Deferred stock-based compensation | (267) | (1,548) | – |
| Accumulated other comprehensive gain (loss) | (1,028) | (1,617) | (878) |
| Accumulated deficit | (48,877) | (54,237) | (4,848) |
| Total stockholders’ equity | 280,933 | 268,041 | 335,457 |
| Total liabilities and stockholders’ equity |
$ 622,401 | $ 608,473 | $ 376,724 |