Revenue of $29.4 million; loss of $0.27 per share
LOS ALTOS, CALIFORNIA, UNITED STATES – 10/23/2008 – Rambus Inc. (NASDAQ:RMBS), one of the world’s 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 world’s premier technology licensing companies specializing in the invention and design of high-speed memory architectures. Additional information is available at www.rambus.com.
Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
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September 30, 2008 | December 31, 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 |
Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) |
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Three Months Ended | Six Months Ended | |||
September 30, 2008 |
September 30, 2007 |
September 30, 2008 |
June 30, 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 six month periods ended September 30, 2008 and September 30, 2007 are presented as follows: | ||||
Three Months Ended | Six Months Ended | |||
September 30, 2008 |
September 30, 2007 |
September 30, 2008 |
September 30, 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 |