Earnings per share of 9 cents; Revenue growth of 8% from the fourth quarter last year
LOS ALTOS, California, United States - 1/19/2006 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 fourth quarter of 2005. Fully diluted earnings per share for the fourth quarter were 9 cents, compared to 6 cents in the fourth quarter last year and 14 cents in the previous quarter. Operating income for the fourth quarter was $7.3 million, compared to $9.6 million in the fourth quarter last year and $3.9 million the previous quarter. Net income for the fourth quarter of 2005 was $9.4 million as compared to $6.5 million in the fourth quarter last year and $14.5 million in the previous quarter. The quarterly earnings per share and net income reflect a pre-tax gain of $5.4 million resulting from repurchases of notes during the quarter versus a pre-tax gain of $18.6 million in the third quarter relating to the repurchase of notes. Revenue for the fourth quarter was $41.6 million, up 7.7% over the fourth quarter last year and up 15.5% from the previous quarter. "We are pleased with the results for the fourth quarter. We achieved record revenue and finished the year by signing an important patent licensing agreement with AMD for which payments will begin in 2006," said Harold Hughes, president and chief executive officer at Rambus. "We built a strong foundation this past year with achievements that demonstrate the value of our technology and give us a solid start to the new year." Fourth quarter results reflected $6.9 million in contract revenues, up 14.3% over the fourth quarter last year and down 13.5% from the previous quarter. The sequential decrease reflects timing of deliverables under certain memory and serial link technology development contracts. Fourth quarter results include $34.7 million in royalties, up 6.5% over the fourth quarter last year and up 23.7% from the previous quarter. The sequential increase in royalties is primarily due to the first quarterly royalty payment of $5.9 million from Infineon under the license agreement announced in March 2005. Total costs and expenses for the fourth quarter of 2005 were $34.3 million compared with $29.0 million in the fourth quarter last year and $32.1 million last quarter. Research and development expense, and marketing, general and administrative expenses, increased $3.4 million and $1.8 million respectively, compared with the fourth quarter of 2004. The increase in research and development expense reflects investment in research and development capability in the United States and Bangalore, while the increase in marketing, general and administrative expenses is a reflection of our commitment to a strong sales presence and a strong infrastructure to support our business as it grows. Rambus reported a pre-tax gain of $5.4 million on the repurchase of $35 million face value of its zero coupon convertible notes during the quarter. The notes were repurchased for a total of $29 million in cash. Primarily as a result of the repurchase of the notes and the repurchase of approximately one million shares of common stock for $13 million, cash equivalents and marketable securities declined from $388 million as of September 30, 2005 to $355 million at year-end. The earnings announcement call will be broadcast live on our website (www.rambus.com) at 2:00 p.m. PST today. Please log-on early if you do not already have the necessary software to listen to the call. The conference call replay number is 888-203-1112 and the ID number is 4466070. For international callers, the number is 719-457-0820. The replay will be available on our website beginning at 5:00 p.m. PST today. About Rambus 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' interface solutions can be found in numerous computing, consumer, and communications products and applications. Rambus is headquartered in Los Altos, California, with regional offices in Chapel Hill, North Carolina; Taipei, Taiwan; Tokyo, Japan and Bangalore, India. Additional information is available at www.rambus.com.
(in thousands, except per share amounts)
(unaudited) Three Months Ended
December 31, 2005 September 30, 2005 December 31, 2004 Revenues:
$6,904 $7,983 $6,038 34,685 28,031 32,571
41,589 36,014 38,609 Costs and expenses:
4,742 4,455 5,512 11,848 10,598 8,430 9,422 8,135 7,608 8,265 8,898 7,470
34,277 32,086 29,020 Operating income 7,312 3,928 9,589 Interest and other income, net 8,084 21,202 916 Income before income taxes 15,396 25,130 10,505 Provision for income taxes 6,015 10,634 3,962 Net income $ 9,381 $ 14,496 $ 6,543 Net income per share - basic $ 0.09 $ 0.15 $ 0.06 Net income per share - diluted $ 0.09 $ 0.14 $ 0.06 Shares used in per share calculations:
99,688 99,944 102,380 103,561 103,211 109,017
Year Ended
December 31, 2005 December 31, 2004 Revenues:
$ 26,876 $ 24,742 130,322 120,132
157,198 144,874 Costs and expenses:
19,766 20,246 40,972 32,627 36,416 29,427 38,282 23,057
135,436 105,357 Operating income 21,762 39,517 Interest and other income, net 34,830 8,368 Income before income taxes 56,592 47,885 Provision for income taxes 22,915 14,326 Net income $ 33,677 $ 33,559 Net income per share - basic $ 0.34 $ 0.33 Net income per share - diluted $ 0.32 $ 0.30 Shares used in per share calculations:
99,876 101,931 103,993 110,050
(in thousands)
(unaudited)
| December 31, 2005 | September 30, 2005 | December 31, 2004 | |
| Assets | |||
| Current assets: | |||
| | $ 42,391 | $ 56,144 | $ 48,310 |
| | 118,416 | 88,973 | 89,483 |
| | 954 | 1,329 | 1,435 |
| | 4,219 | 13,703 | 13,861 |
| | 4,235 | 5,168 | 4,094 |
| | 170,215 | 165,317 | 157,183 |
| Marketable securities, long-term | 194,583 | 242,906 | 98,567 |
| Restricted investments | 2,279 | 2,274 | 5,067 |
| Deferred taxes, long-term | 68,626 | 63,387 | 75,295 |
| Purchased intangible assets, net | 23,650 | 22,294 | 21,765 |
| Property and equipment, net | 18,898 | 20,542 | 17,578 |
| Goodwill, net | 3,315 | 3,315 | 581 |
| Other assets | 3,953 | 4,895 | 688 |
| Total assets | $ 485,519 | $ 524,930 | $ 376,724 |
| Total cash, cash equivalents, and marketable securities | $ 355,390 | $ 388,023 | $ 236,360 |
| Liabilities And Stockholders' Equity | |||
| Current liabilities: | |||
| | $ 19,634 | $ 19,415 | $ 17,444 |
| | 973 | 4,963 | 19,271 |
| | 20,607 | 24,378 | 36,715 |
| Notes payable | 160,000 | 195,000 | - |
| Deferred revenue, less current portion | 8,317 | 7,905 | 4,552 |
| Other long-term liabilities | 1,592 | 1,991 | - |
| | 190,516 | 229,274 | 41,267 |
| Stockholders' equity: | |||
| | 99 | 100 | 103 |
| | 327,524 | 331,499 | 341,080 |
| | (1,647) | (1,562) | (878) |
| | (30,973) | (34,381) | (4,848) |
| | 295,003 | 295,656 | 335,457 |
| Total liabilities and stockholders' equity | $ 485,519 | $ 524,930 | $ 376,724 |