Rambus Reports Record Royalties, Revenue and Earnings for the Quarter and Year Ended September 30, 2000
Fiscal Q4 Royalties Triple Sequentially to $19.9 Million
MOUNTAIN VIEW, Calif., Oct 18, 2000 (BUSINESS WIRE) -- Q4 earnings announcement call live on website (www.rambus.com) at 2:00 p.m. PDT. Conference call replay number 800-633-8284, reservation no. 16570257; replay also available on website. Replay available for 72 hours, beginning at 4:00 p.m. PDT.
Rambus Inc. (Nasdaq: RMBS chart, msgs) today reported financial results for its fourth fiscal quarter and year ended September 30, 2000. Revenues for the quarter were a record $26.9 million, up 119% over the same period last year and up 52% from the previous quarter. For the full fiscal year the Company reported revenues of $72.3 million, an increase of 67% from the previous year.
Included in fourth quarter results was a record $19.9 million in royalties, more than three times the amount reported in the previous quarter. The fourth quarter results included both increased royalties received from licensees based on their shipments of RDRAMs and controllers that connect to RDRAMs (RDRAM-compatible ICs) as well as the first royalties from licensees for the use of Rambus intellectual property (IP) in SDRAMs, DDR SDRAMs and controllers that connect to them (SDRAM-compatible ICs). Royalties for the fiscal year were $32.6 million, more than four times the amount recorded in fiscal 1999.
Contract revenue for the fourth fiscal quarter was $7.0 million, down $4.2 million from the previous quarter. The previous quarter results included approximately $3.7 million of deferred revenue recognized due to the cancellation of contracts of certain licensees who are reducing their activities in the DRAM market. No such revenue from contract cancellations was recognized in the fourth quarter. For the fiscal year, contract revenue was $39.7 million, an increase of 12% from fiscal 1999.
Excluding acquisition-related costs, one-time employee compensation expenses taken earlier in the year and a one-time tax adjustment, pro forma operating income for the fourth quarter was $14.5 million, compared to $3.4 million in the same period last year and $6.0 million in the previous quarter. On the same basis, pro forma operating income for the fiscal year was $28.4 million compared to $9.5 million in fiscal 1999.
Excluding acquisition-related costs, one-time employee compensation expenses and a one-time tax adjustment, fourth quarter pro forma net income was a record $10.2 million ($0.09 per diluted share), up 285% from the same period last year and up 115% from the previous quarter. On the same basis, pro forma net income for fiscal 2000 was $21.5 million ($0.20 per diluted share), an increase of 147% over fiscal 1999. All per-share numbers have been adjusted for a four-for-one stock split effective June 14, 2000.
"We are obviously very pleased with our financial performance in fiscal 2000 and especially in the fourth quarter," said Geoff Tate, CEO of Rambus Inc. "The tremendous leveraging impact of receiving royalties--from the sale of both RDRAM-compatible and SDRAM-compatible ICs--on our financial model can be seen both in our operating statement, where our operating margin in fiscal Q4 exceeded 50% for the first time, and on the balance sheet where our total cash balances increased by $35 million during the quarter to a total of $132 million. We are confident in our long term outlook: our patent position is strong and RDRAMs offer the best solution for high performance computer, communications and consumer systems. However, near-term earnings growth will depend on the ramps of the Sony PlayStation2 into the U.S. and the Intel Pentium 4, the relative price of RDRAMs to SDRAMs and the timing of additional licensees for the use of our IP in SDRAM-compatible ICs. In addition, we anticipate increased costs in the near term due to our vigorous legal defense of our IP and a move to larger facilities for long-term growth."
Because of its continued and growing profitability, the Company determined that it would likely be able to take advantage of its deferred tax assets and therefore booked a $38 million credit to income tax expense in the fourth quarter to eliminate a partial valuation allowance against the deferred tax assets.
Rambus Inc. develops and licenses high-bandwidth chip connection technologies to enhance the performance of computers, consumer electronics and communications products. Providers of Rambus-based integrated circuits include the world's leading DRAM, ASIC and PC controller manufacturers.
This release contains forward-looking statements regarding financial results for future periods. Actual results could differ materially. Among the factors which could cause results to differ materially is the possibility that the Pentium 4 and PlayStation2 ramps will be slower than expected, that shipment of Rambus ICs and other licensed products by Rambus licensees will be below forecast, that no additional licenses for SDRAM-compatible ICs will be signed, that prices of RDRAMs will remain high compared to SDRAMs and that litigation and building costs will exceed the Company's plans.
RAMBUS INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
-------------------- ------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2000 2000 1999 2000 1999
------ ------ ------ ------ ------
Revenues:
Contract revenues $ 6,987 $11,186 $10,630 $39,683 $35,353
Royalties 19,921 6,574 1,675 32,628 8,017
-------- -------- -------- -------- --------
Total revenues 26,908 17,760 12,305 72,311 43,370
-------- -------- -------- -------- --------
Costs and expenses:
Cost of
contract revenues 2,666 2,908 3,701 12,093 12,232
Research
and development 3,299 2,619 1,425 10,699 8,123
Marketing, general
& administrative 6,472 6,205 3,733 21,140 13,516
-------- -------- -------- -------- --------
Total costs
and expenses 12,437 11,732 8,859 43,932 33,871
-------- -------- -------- -------- --------
Operating income 14,471 6,028 3,446 28,379 9,499
Other income 1,254 1,296 770 4,714 4,339
-------- -------- -------- -------- --------
Pro forma income
before income taxes 15,725 7,324 4,216 33,093 13,838
Provision for
income taxes 5,504 2,564 1,563 11,583 5,120
-------- -------- -------- -------- --------
Pro forma net income $10,221 $ 4,760 $ 2,653 $21,510 $ 8,718
======== ======== ======== ======== ========
Pro forma net income
per share - basic $ 0.10 $ 0.05 $ 0.03 $ 0.22 $ 0.09
======== ======== ======== ======== ========
Pro forma net income
per share - diluted $ 0.09 $ 0.04 $ 0.03 $ 0.20 $ 0.09
======== ======== ======== ======== ========
Shares used in per
share calculation:
Basic 98,001 97,350 94,424 96,487 93,328
Diluted 110,049 108,859 101,164 107,775 100,208
Notes:
1. Shares and per-share data adjusted for 4:1 stock split effective
June 14, 2000. 2. Pro forma income shown above excludes the effect of amortization
of goodwill and other acquisition-related intangibles of $221K in
the three months ended 9/30/00, $209K in the three months ended
6/30/00, and $802K in the year ended 9/30/00; one-time employee
compensation expenses of $171,085K in the year ended 9/30/00; and
a one-time tax adjustment of $38 million in the three months and
year ended 9/30/00. 3. This pro forma information is not prepared in accordance with
generally accepted accounting principles. 4. A reconciliation from pro forma net income to the reported results
is shown on the next table.
RAMBUS INC.
RECONCILIATION OF PRO FORMA NET INCOME TO REPORTED RESULTS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
------------------ ------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2000 2000 1999 2000 1999
------ ------ ------ ------ ------
Pro forma
net income $10,221 $4,760 $2,653 $21,510 $ 8,718
Acquisition-related
expenses (221) (209) -- (802) --
Employee
compensation expense -- -- -- (171,085) --
Tax benefit 77 73 -- 702 --
Tax adjustment 43,548 -- -- 43,548 --
-------- -------- -------- -------- --------
Net income (loss) $53,625 $4,624 $2,653 $(106,127) $8,718
======== ======== ======== ======== ========
Pro forma net income
per share - basic $ 0.10 $ 0.05 $ 0.03 $ 0.22 $ 0.09
Acquisition-related
expenses (0.00) (0.00) -- (0.00) --
Employee
compensation expense -- -- -- (1.77) --
Tax adjustment 0.45 -- -- 0.45 --
-------- -------- -------- -------- --------
Net income (loss)
per share - basic $ 0.55 $ 0.05 $ 0.03 $(1.10) $ 0.09
======== ======== ======== ======== ========
Pro forma net income
per share - diluted $ 0.09 $ 0.04 $ 0.03 $ 0.20 $ 0.09
Acquisition-related
expenses (0.00) (0.00) -- (0.00) --
Employee
compensation expense -- -- -- (1.59) --
Tax adjustment 0.40 -- -- 0.40 --
Difference in
share count(1) -- -- -- (0.11) --
-------- -------- -------- -------- --------
Net income (loss)
per share - diluted $ 0.49 $ 0.04 $ 0.03 $(1.10) $ 0.09
======== ======== ======== ======== ========
Note: Per-share data adjusted for 4:1 stock split effective June 14, 2000.
(1) Difference in share count results from the inclusion of equivalent
shares representing outstanding stock options and warrants in
periods with profits and exclusion of such equivalent shares in
periods with losses.
RAMBUS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Year Ended
------------------ ------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2000 2000 1999 2000 1999
------ ------ ------ ------ ------
(unaudited)(unaudited)(unaudited)
Revenues:
Contract revenues $ 6,987 $11,186 $10,630 $39,683 $35,353
Royalties 19,921 6,574 1,675 32,628 8,017
-------- -------- -------- -------- --------
Total revenues 26,908 17,760 12,305 72,311 43,370
-------- -------- -------- -------- --------
Costs and expenses:
Cost of
contract revenues 2,666 2,908 3,701 12,093 12,232
Research
and development 3,520 2,828 1,425 11,501 8,123
Marketing, general
& administrative 6,472 6,205 3,733 21,140 13,516
Employee
compensation expense -- -- -- 171,085 --
-------- -------- -------- -------- --------
Total costs
and expenses 12,658 11,941 8,859 215,819 33,871
-------- -------- -------- -------- --------
Operating income (loss) 14,250 5,819 3,446 (143,508) 9,499
Other income 1,254 1,296 770 4,714 4,339
-------- -------- -------- -------- --------
Income (loss)
before income taxes 15,504 7,115 4,216 (138,794) 13,838
Provision for
income taxes (benefit)(38,121) 2,491 1,563 (32,667) 5,120
-------- -------- -------- -------- --------
Net income (loss) $53,625 $ 4,624 $ 2,653 $(106,127) $ 8,718
======== ======== ======== ======== ========
Net income (loss)
per share - basic $ 0.55 $ 0.05 $ 0.03 $ (1.10) $ 0.09
======== ======== ======== ======== ========
Net income (loss)
per share - diluted $ 0.49 $ 0.04 $ 0.03 $ (1.10) $ 0.09
======== ======== ======== ======== ========
Shares used in per
share calculation:
Basic 98,001 97,350 94,424 96,487 93,328
Diluted 110,049 108,859 101,164 96,487 100,208
Note: Shares and per-share data adjusted for 4:1 stock split effective June 14, 2000.
RAMBUS INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, June 30, September 30,
2000 2000 1999
------ ------ ------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 63,093 $ 28,261 $ 14,982
Marketable securities 59,127 62,079 72,158
Accounts receivable 68 5,105 1,499
Prepaid and deferred taxes 17,661 3,197 7,579
Prepaids and
other current assets 2,988 2,576 2,260
-------- -------- --------
Total current assets 142,937 101,218 98,478
Property and equipment, net 6,724 4,433 4,232
Marketable securities,
less current portion 7,548 4,049 5,658
Restricted cash 2,500 2,500 2,500
Deferred taxes, long-term 55,404 1,063 4,123
Other assets 4,518 3,670 782
-------- -------- --------
Total assets $219,631 $116,933 $115,773
======== ======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other
current liabilities $ 9,032 $ 5,787 $ 4,425
Current portion
of deferred revenue 24,155 22,395 32,279
-------- -------- --------
Total current liabilities 33,187 28,182 36,704
Deferred revenue,
less current portion 24,122 8,951 17,505
-------- -------- --------
Total liabilities 57,309 37,133 54,209
-------- -------- --------
Stockholders' equity:
Common stock 97 97 24
Additional paid-in capital 285,885 257,104 78,574
Deferred stock-based
compensation (571) (599) --
Accumulated deficit (123,132) (176,757) (17,005)
Accumulated other
comprehensive gain (loss) 43 (45) (29)
-------- -------- --------
Total stockholders' equity 162,322 79,800 61,564
-------- -------- --------
Total liabilities
and stockholders' equity $219,631 $116,933 $115,773
======== ======== ========
Contact:
Rambus Inc.
Gary G. Harmon, 650/944-8000 (Sr. Vice President,
Finance & CFO)
Susan Berry, 650/944-7900 (Rambus Investor Relations) |
