To: Grary42 who wrote (71845 ) 5/4/2001 10:06:33 PM From: NightOwl Read Replies (1) | Respond to Goodnight Gary42,Contract revenues decreased 37.8% to $7.6 million (24.3% of total revenues) and 28.2% to $15.5 million (23.4% of total revenues) in the second quarter and first six months of fiscal 2001, respectively, over the comparable periods of fiscal 2000 due largely to the expiration of revenue recognition periods for several RDRAM contracts. Included in the second quarter of fiscal 2001 was approximately $2.1 million of remaining deferred revenue from a contract which was cancelled due to the licensee's reduced activities in the merchant DRAM market, compared to $4.4 million of such revenue in the comparable period of the previous year. Such a cancellation results in the termination of all obligations on RDRAM development for both parties. Since all license and engineering payments already received are nonrefundable, the balance of deferred revenue on this contract was recognized upon cancellation in the second quarter. The Company does not expect additional cancellations of this magnitude in the future. The Company does anticipate continuing to book additional contracts, especially contracts with existing licensees for newer versions of Rambus technologies. However, it is anticipated that contract revenues will continue to decline over time as the value of contracts for which the revenue recognition periods have expired exceeds the value of new contracts. The Company's past success in signing licensees has reduced the number of potential new licensees, which also contributes to the anticipated continuing decline in contract revenues. not "born every minute."
