Earnings per share of 5 cents
LOS ALTOS, CA -April 14, 2003 - Rambus Inc. (Nasdaq: RMBS), a leading provider of chip-to-chip interface products and services, today reported financial results for its second fiscal quarter ended March 31, 2003. Earnings per share for the March quarter were 5 cents, compared to 7 cents in the same period last year and 6 cents in the previous quarter. Net income for the March quarter was $5.1 million (18% of revenues), compared to $6.7 million in the same period last year and $5.5 million in the previous quarter. Revenue for the quarter was $28.1 million, up 19% over the same period last year and up 9% from the previous quarter.
"This quarter reflects the progress that we are making with our new Yellowstone and Redwood interface solutions. The increase in both revenue and engineering spending is primarily driven by new contracts with Sony and Toshiba," said Geoff Tate, CEO of Rambus Inc.
March quarter results reflect $3.3 million in contract revenue, up 90% over the same period last year and up 137% from the previous quarter. This increase in contract revenue primarily reflects the contracts signed recently for Yellowstone and Redwood technology. March quarter results include $24.8 million in royalties, up 14% over the same period last year and up 2% from the previous quarter. Royalties were up primarily due to DDR memories and SDRAM memory controllers.
Total costs and expenses in the March quarter increased $4.7 million from last quarter primarily as a result of an increase in litigation costs, an increase in investment in research and development and an increase in the cost of contract revenue. The increase in litigation costs was driven primarily by costs associated with preparing for the upcoming trial with the Federal Trade Commission. The increases in research and development and the cost of contract revenue are driven by the investment required to meet the milestones on the contracts signed for Yellowstone and Redwood. Total costs and expenses were $23.6 million versus $18.9 million last quarter and $14.8 million in the comparable period last year.
The March quarter results include a pre-tax gain of $1.2 million, comprised of Other Income of $1.7 million less research and development expense of $.5 million, resulting from the divestiture of Rambus's investment in NurLogic Design, Inc. which was acquired by Artisan Components during the quarter. The divestiture resulted in the receipt of cash, stock and an intellectual property license.
Fiscal Q2 FY2003 earnings announcement call live on website (www.rambus.com) today at 1:30 p.m. PDT. Conference call replay number 800-642-1687 ID number 9635397; replay also available on website. Replay available for one week, beginning at 5:00 p.m. PDT.
About Rambus Inc.
Rambus is a leading provider of chip-to-chip interface products and services. The company's breakthrough technology and engineering expertise have helped leading chip and system companies to solve their challenging I/O problems and bring industry-leading products to market. Rambus' interface solutions can be found in numerous computing, consumer electronic and networking products. Additional information is available at www.rambus.com.
This release and the conference call on today's date contain forward-looking statements under the Private Securities Litigation Reform Act of 1995 regarding the Company's financial prospects, development plans, anticipated product shipment dates, litigation prospects, relations with licensees and other third parties and various other matters. Such forward-looking statements are based on current expectations, estimates and projections about the Company's industry, management's beliefs, and certain assumptions made by the Company's management. Actual results may differ materially. Among the reasons which could cause actual results to differ materially are the possibility of inadequate shipments of Rambus RDRAM memory devices and controllers for the Sony PlayStation2 and the PC main memory market, the market response to these products, the continued deterioration in the DRAM market, any delay in the development of Rambus-based products by licensees, any delay in the development and shipment of new Rambus products, any delay in the development and shipment of products compatible with Rambus products, a strong response of the market to competing technology, a lack of progress on price and cost reduction by RDRAM suppliers, a failure to sign new contracts or maintain existing contracts for RDRAM, Yellowstone, RaSer or SDRAM-compatible and DDR-compatible ICs, adverse litigation decisions and other factors that are described in our SEC filings including our 10-K and 10-Qs.