UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)
 
October 20, 2014
 
Rambus Inc.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
Delaware
 
000-22339
 
94-3112828
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(I. R. S. Employer
Identification No.)
 
1050 Enterprise Way, Suite 700
 Sunnyvale, California
 
 
 
94089
(Address of principal executive offices)
 
 
 
(ZIP Code)

(408) 462-8000
(Registrant’s telephone number, including area code)
 
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))








Item 2.02 – Results of Operations and Financial Condition.
 
On October 20, 2014, Rambus Inc. (the “Company”) issued a press release announcing results for the quarter ended September 30, 2014. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.
 
The information under Item 2.02 in this current report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
 
Item 9.01 – Financial Statements and Exhibits.
 
(d) Exhibits.
 
99.1
Press release dated October 20, 2014.
 

 






 

 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
Date: October 20, 2014
 
 
 
Rambus Inc.
 
 
 
 
 
 
 
/s/ Satish Rishi
 
 
 
 
Satish Rishi, Senior Vice President, Finance and
Chief Financial Officer








 
Exhibit Index
 
 
 
 
Exhibit
Number
  
Exhibit Title
 
 
99.1
  
Press release dated October 20, 2014.








Exhibit 99.1

News Release
RAMBUS REPORTS THIRD QUARTER FINANCIAL RESULTS

Business and Financial Highlights:
Generated quarterly revenue of $69.7 million
Introduced family of DPA resistant cryptographic cores
Announced DDR4/3 PHY interoperability with Northwest Logic
GAAP diluted net income per share of $0.05; non-GAAP diluted net income per share of $0.13
SUNNYVALE, Calif. - October 20, 2014 - Rambus Inc. (NASDAQ:RMBS), the innovative technology solutions company that brings invention to market, today reported financial results for the third quarter ended September 30, 2014.

GAAP Financial Results:
Revenue for the third quarter of 2014 was $69.7 million, down 9% on a sequential basis from the second quarter of 2014 primarily due to a one-time catch-up payment from the new license agreement signed with Qualcomm during the second quarter of 2014 and lower royalty revenue from NVIDIA. As compared to the third quarter of 2013, revenue was down 5% primarily due to lower royalty revenue from Samsung and NVIDIA, offset by the license agreements signed with Qualcomm and Micron Technology.

Revenue for the nine months ended September 30, 2014 was $224.5 million, which was up 13% over the prior year period, primarily due to the license agreements signed with SK hynix, Micron Technology, Nanya Technology Corporation and Qualcomm, partially offset by lower royalty revenue from Samsung.

Total operating costs and expenses for the third quarter of 2014 were $55.2 million, 2% lower than the previous quarter and 14% lower than the third quarter of 2013. Third quarter operating costs and expenses of $55.2 million included $3.4 million of stock-based compensation expenses and $6.7 million of amortization expenses. In comparison, total operating costs and expenses for the second quarter of 2014 of $56.4 million included $4.9 million of stock-based compensation expenses, $6.8 million of amortization expenses and $1.0 million of retention bonus expense from acquisitions. Total operating costs and expenses for the third quarter of 2013 were $64.2 million, which included $3.4 million of stock-based compensation expenses, $8.1 million of impairment of goodwill, $1.1 million of restructuring charges, $7.4 million of amortization expenses and $1.5 million of retention bonus expense from acquisitions. The change in total operating costs and expenses in the third quarter of 2014 as compared to the second quarter of 2014 was primarily due to decreased stock-based compensation expenses and retention bonus expense from acquisitions. The change in total operating costs and expenses in the third quarter of 2014 as compared to the third quarter of 2013 was primarily attributable to impairment of goodwill and restructuring charges in the third quarter of 2013 and lower retention bonus expense from acquisitions partially offset by higher cost of sales associated with the sale of lighting products and bonus expense.

Total operating costs and expenses for the nine months ended September 30, 2014 were $166.8 million, 8% lower than the nine months ended September 30, 2013. The nine months operating costs and expenses of $166.8 million included $11.2 million of stock-based compensation expenses, $20.3 million of amortization expenses and $2.5 million of retention bonus expense from acquisitions. This is compared to total operating costs and expenses for the nine months ended September 30, 2013 of $181.8 million, which included $11.9 million of stock-based compensation expenses, $8.1 million of impairment of goodwill, $3.3 million of restructuring charges, $8.5 million one-time reversal of accrued SK hynix related litigation costs, $21.4 million of amortization expenses and $8.9 million of retention bonus expense from acquisitions. The change in total operating costs and expenses was primarily attributable to impairment of goodwill and restructuring charges in 2013 and lower retention bonus expense from acquisitions, partially offset by higher cost of sales associated with the sale of lighting products and as a result of the one-time reversal of accrued SK hynix related litigation costs in the second quarter of 2013.

Net income for the third quarter of 2014 was $5.5 million as compared to net income of $5.0 million in the second quarter of 2014 and net loss of $5.7 million in the third quarter of 2013. Diluted net income per share for the third quarter of 2014 was





$0.05 as compared to diluted net income per share of $0.04 in the second quarter of 2014 and diluted net loss per share of $0.05 in the third quarter of 2013.

Net income for the nine months ended September 30, 2014 was $18.4 million as compared to a net loss of $24.0 million for the same period of 2013. Diluted net income per share for the nine months ended September 30, 2014 was $0.16 as compared to a diluted net loss per share of $0.21 for the same period of 2013.

Non-GAAP Financial Results (1):

Total non-GAAP operating costs and expenses in the third quarter of 2014 were $45.1 million, 3% higher than the previous quarter, and 5% higher than the third quarter of 2013.

Total non-GAAP operating costs and expenses for the nine months ended September 30, 2014 were $132.8 million as compared to $136.2 million in the same period of 2013 due primarily to lower general litigation expenses offset by higher cost of sales associated with the sale of lighting products.

Non-GAAP net income in the third quarter of 2014 was $14.8 million, 22% lower than the prior quarter and 15% lower than the third quarter of 2013. Non-GAAP diluted net income per share was $0.13 in the third quarter of 2014 as compared to $0.16 in the prior quarter and $0.15 in the third quarter of 2013.

Non-GAAP net income for the nine months ended September 30, 2014 was $53.4 million as compared to $33.3 million in the same period of 2013. Non-GAAP diluted net income per share was $0.45 for the nine months ended September 30, 2014 as compared to non-GAAP diluted net income per share of $0.29 for the nine months ended September 30, 2013.

Other Financial Highlights:

Cash, cash equivalents, and marketable securities as of September 30, 2014 were $271.1 million, an increase of $24.7 million from June 30, 2014.

During the third quarter of 2014, the Company recorded an income tax provision of approximately $5.3 million. As the Company continues to maintain a full valuation allowance against its U.S. deferred tax assets, the Company’s tax provision consists of primarily foreign withholding taxes.

Fourth Quarter 2014 Outlook:

For the fourth quarter of 2014, the Company expects revenue to be between $70 million and $75 million. Revenue is not without risk and includes expectations that the Company will sign new customers for patent as well as solutions licensing.

Conference Call:

The Company will host a conference call at 2:00 p.m. PT today to discuss its financial results. The call, audio and slides will be available online at investor.rambus.com. A replay will be available following the call as a webcast on the Rambus Investor Relations website and for one week at the following numbers: (855) 859-2056 (domestic) or (404) 537-3406 (international) with ID#12537633.

(1)
Non-GAAP Financial Information:

In the commentary set forth above and in the financial statements included in this earnings release, the Company presents the following non-GAAP financial measures: operating costs and expenses, operating income (loss) and net income (loss). In computing each of these non-GAAP financial measures, the following items were considered as discussed below: stock-based compensation expenses, acquisition-related transaction costs and retention bonus expense, amortization expenses, costs of restatement and related legal activities, restructuring charges, impairment charges, severance costs, non-cash interest expense and certain other one-time adjustments. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for both its own assessment of, and to show investors, how the Company’s performance compares to other periods. The non-GAAP financial measures used by the Company may be calculated differently





from, and therefore may not be comparable to, similarly titled measures used by other companies. Reconciliation from GAAP to non-GAAP results is included in the financial statements contained in this release.
The Company’s non-GAAP financial measures reflect adjustments based on the following items:
Stock-based compensation expense. These expenses primarily relate to employee stock options, employee stock purchase plans, and employee non-vested equity stock and non-vested stock units. The Company excludes stock-based compensation expense from its non-GAAP measures primarily because such expenses are non-cash expenses that the Company does not believe are reflective of ongoing operating results. Additionally, given the fact that other companies may grant different amounts and types of equity awards and may use different option valuation assumptions, excluding stock-based compensation expense permits more accurate comparisons of the Company’s results with peer companies.
Acquisition-related transaction costs and retention bonus expense. These expenses include all direct costs of certain acquisitions and the current periods’ portion of any retention bonus expense associated with the acquisitions. The Company excludes these expenses in order to provide better comparability between periods.

Restructuring charges. These charges may consist of severance, contractual retention payments, exit costs and other charges and are excluded because such charges are not directly related to ongoing business results and do not reflect expected future operating expenses.

Impairment of goodwill and long-lived assets. These charges consist of non-cash charges to goodwill and long-lived assets and are excluded because such charges are non-recurring and do not reduce the Company’s liquidity.
Amortization expense. The Company incurs expenses for the amortization of intangible assets acquired in acquisitions. The Company excludes these items because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Company’s prior acquisitions and have no direct correlation to the operation of the Company’s core business.
Costs of restatement and related legal activities. These expenses consist primarily of investigation, audit, legal and other professional fees related to the 2006-2007 stock option investigation and related litigation, as well as recoveries received from third parties. The Company excludes these costs and recoveries from its non-GAAP measures primarily because the Company believes that these non-recurring costs and recoveries have no direct correlation to the operation of the Company’s core business.
Non-cash interest expense on convertible notes. The Company incurs non-cash interest expense related to its convertible notes. The Company excludes non-cash interest expense related to its convertible notes to provide more accurate comparisons of the Company’s results with other peer companies and to more accurately reflect the Company’s ongoing operations.
Reversal of one-time litigation costs. These adjustments are a one-time litigation cost reversal of prior litigation costs accrued related to previously awarded costs that the Company was required to pay in connection with the SK hynix and Micron Technology litigation. The Company excludes these reversals from its non-GAAP measures because the Company believes that these reversals have no direct correlation to the operations of the Company’s core business and they are a one-time event.
Severance costs. These expenses relate to the separation payment to the Company’s former chief executive officer. The Company excludes these costs from its non-GAAP measures because the Company believes that these non-recurring costs have no direct correlation to the operations of the Company’s core business.
Income tax adjustments. For purposes of internal forecasting, planning and analyzing future periods that assume net income from operations, the Company estimates a fixed, long-term projected tax rate of approximately 36 percent, which consists of estimated U.S. federal and state tax rates, and excludes tax rates associated with certain items such as withholding tax, tax credits and deferred tax asset valuation allowance. Accordingly, the Company has applied the 36 percent tax rate to its non-GAAP financial results for all periods to assist the Company’s planning for future periods. The Company has provided below a reconciliation of its GAAP provision for income taxes and GAAP effective tax rate to the assumed non-GAAP provision for income taxes and non-GAAP effective tax rate.
On occasion in the future, there may be other items, such as significant gains or losses from contingencies that the Company may exclude in deriving its non-GAAP financial measures if it believes that doing so is consistent with the goal of providing useful information to investors and management.

Forward-Looking Statements






This release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 including relating to Rambus’ expectations regarding revenue for the fourth quarter of 2014 and estimated, fixed, long-term projected tax rates. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by Rambus’ management. Actual results may differ materially. Rambus’ business generally is subject to a number of risks which are described more fully in Rambus’ periodic reports filed with the Securities and Exchange Commission. Rambus undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

About Rambus Inc.

Rambus brings invention to market. Our customizable IP cores, architecture licenses, tools, services, and training improve the competitive advantage of our customers’ products while accelerating their time-to-market. Rambus products and innovations capture, secure and move data. For more information, visit www.rambus.com.
RMBSFN
Contacts:
Linda Ashmore
Corporate Communications
Rambus Inc.
(408) 462-8411
lashmore@rambus.com
Nicole Noutsios
Investor Relations
Rambus Inc.
(408) 462-8050
nnoutsios@rambus.com







Rambus Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

 
 
September 30, 2014
 
December 31, 2013
ASSETS
   
 
   
 
 
 
 
Current assets:
   
 
   
Cash and cash equivalents
$
125,686

 
$
338,696

Marketable securities
145,440

 
48,966

Accounts receivable
5,099

 
2,251

Prepaids and other current assets
7,959

 
8,253

Deferred taxes
1,379

 
205

Total current assets
285,563

 
398,371

Intangible assets, net
95,694

 
117,172

Goodwill
116,899

 
116,899

Property, plant and equipment, net
65,899

 
72,642

Deferred taxes, long-term
560

 
4,797

Other assets
2,542

 
3,498

Total assets
$
567,157

 
$
713,379

 
 
 
 
LIABILITIES & STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
5,697

 
$
7,001

Accrued salaries and benefits
11,840

 
33,448

Convertible notes, short-term

 
164,047

Other accrued liabilities
8,739

 
8,346

Total current liabilities
26,276

 
212,842

Long-term liabilities:
 
 
 
Convertible notes, long-term
113,692

 
109,629

Long-term imputed financing obligation
39,148

 
39,349

Other long-term liabilities
10,441

 
11,330

Total long-term liabilities
163,281

 
160,308

Total stockholders’ equity
377,600

 
340,229

Total liabilities and stockholders’ equity
$
567,157

 
$
713,379








Rambus Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)


 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
 
 
Revenue:
 
 
 
 
 
 
 
Royalties
$
64,009

 
$
71,013

 
$
207,387

 
$
194,244

Contract and other revenue
5,703

 
2,281

 
17,131

 
3,835

Total revenue
69,712

 
73,294

 
224,518

 
198,079

Operating costs and expenses:
 
 
 
 
 
 
 
Cost of revenue (1)
10,540

 
8,958

 
31,199

 
22,857

Research and development (1)
27,014

 
27,553

 
81,580

 
91,178

Marketing, general and administrative (1)
18,200

 
18,698

 
55,639

 
57,956

Restructuring charges

 
1,129

 
39

 
3,335

Impairment of goodwill and long-lived assets

 
8,070

 

 
8,070

Gain from sale of intellectual property

 

 
(170
)
 
(1,388
)
Gain from settlement
(510
)
 
(179
)
 
(1,530
)
 
(179
)
Total operating costs and expenses
55,244

 
64,229

 
166,757

 
181,829

Operating income
14,468

 
9,065

 
57,761

 
16,250

Interest income and other income (expense), net
(549
)
 
66

 
(432
)
 
(1,373
)
Interest expense
(3,059
)
 
(8,552
)
 
(21,755
)
 
(23,290
)
Interest and other income (expense), net
(3,608
)
 
(8,486
)
 
(22,187
)
 
(24,663
)
Income (loss) before income taxes
10,860

 
579

 
35,574

 
(8,413
)
Provision for income taxes
5,347

 
6,304

 
17,214

 
15,558

Net income (loss)
$
5,513

 
$
(5,725
)
 
$
18,360

 
$
(23,971
)
Net income (loss) per share:
   
 
   
 
   
 
   
Basic
$
0.05

 
$
(0.05
)
 
$
0.16

 
$
(0.21
)
Diluted
$
0.05

 
$
(0.05
)
 
$
0.16

 
$
(0.21
)
Weighted average shares used in per share calculation
   
 
   
 
   
 
   
Basic
114,523

 
112,640

 
114,080

 
112,144

Diluted
118,206

 
112,640

 
117,540

 
112,144

 
 
 
 
 
 
 
 
_________
(1) Total stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013 are presented as follows:
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
Cost of revenue
$
12

 
$
7

 
$
34

 
$
12

Research and development
$
1,648

 
$
1,630

 
$
5,574

 
$
5,166

Marketing, general and administrative
$
1,781

 
$
1,726

 
$
5,587

 
$
6,707







Rambus Inc.
Supplemental Reconciliation of GAAP to Non-GAAP Results
(In thousands)
(Unaudited)

 
Three Months Ended
 
Nine Months Ended
 
September 30, 2014
 
June 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
 
 
 
 
 
 
 
 
 
 
Operating costs and expenses
$
55,244

 
$
56,414

 
$
64,229

 
$
166,757

 
$
181,829

Adjustments:
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
(3,441
)
 
(4,855
)
 
(3,363
)
 
(11,195
)
 
(11,885
)
Acquisition-related transaction costs and retention bonus expense
(6
)
 
(1,028
)
 
(1,512
)
 
(2,469
)
 
(8,909
)
Amortization expense
(6,741
)
 
(6,757
)
 
(7,383
)
 
(20,295
)
 
(21,420
)
Reversal of one-time litigation costs

 

 

 

 
8,482

Restructuring charges

 

 
(1,129
)
 
(39
)
 
(3,335
)
Impairment of goodwill and long-lived assets

 

 
(8,070
)
 

 
(8,070
)
Severance costs

 

 

 

 
(514
)
Costs of restatement and related legal activities

 

 

 

 
(19
)
Non-GAAP operating costs and expenses
$
45,056

 
$
43,774

 
$
42,772

 
$
132,759

 
$
136,159

 
 
 
 
 
 
 
 
 
 
Operating income
$
14,468

 
$
20,104

 
$
9,065

 
$
57,761

 
$
16,250

Adjustments:
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
3,441

 
4,855

 
3,363

 
11,195

 
11,885

Acquisition-related transaction costs and retention bonus expense
6

 
1,028

 
1,512

 
2,469

 
8,909

Amortization expense
6,741

 
6,757

 
7,383

 
20,295

 
21,420

Reversal of one-time litigation costs

 

 

 

 
(8,482
)
Restructuring charges

 

 
1,129

 
39

 
3,335

Impairment of goodwill and long-lived assets

 

 
8,070

 

 
8,070

Severance costs

 

 

 

 
514

Costs of restatement and related legal activities

 

 

 

 
19

Non-GAAP operating income
$
24,656

 
$
32,744

 
$
30,522

 
$
91,759

 
$
61,920

 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
$
10,860

 
$
11,438

 
$
579

 
$
35,574

 
$
(8,413
)
Adjustments:
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
3,441

 
4,855

 
3,363

 
11,195

 
11,885

Acquisition-related transaction costs and retention bonus expense
6

 
1,028

 
1,512

 
2,469

 
8,909

Amortization expense
6,741

 
6,757

 
7,383

 
20,295

 
21,420

Reversal of one-time litigation costs

 

 

 

 
(8,482
)
Restructuring charges

 

 
1,129

 
39

 
3,335

Impairment of goodwill and long-lived assets

 

 
8,070

 

 
8,070

Severance costs

 

 

 

 
514






Costs of restatement and related legal activities

 

 

 

 
19

Impairment of investment
600

 

 

 
600

 
1,400

Non-cash interest expense on convertible notes
1,515

 
5,469

 
5,135

 
13,226

 
13,369

Non-GAAP income before income taxes
$
23,163

 
$
29,547

 
$
27,171

 
$
83,398

 
$
52,026

GAAP provision for income taxes
5,347

 
6,395

 
6,304

 
17,214

 
15,558

Adjustment to GAAP provision for income taxes
2,992

 
4,242

 
3,478

 
12,810

 
3,171

Non-GAAP provision for income taxes
8,339

 
10,637

 
9,782

 
30,024

 
18,729

Non-GAAP net income
$
14,824

 
$
18,910

 
$
17,389

 
$
53,374

 
$
33,297

 
 
 
 
 
 
 
 
 
 
Non-GAAP basic net income per share
$
0.13

 
$
0.17

 
$
0.15

 
$
0.47

 
$
0.30

Non-GAAP diluted net income per share
$
0.13

 
$
0.16

 
$
0.15

 
$
0.45

 
$
0.29

Weighted average shares used in non-GAAP per share calculation:
 
 
 
 
 
 
 
 
 
Basic
114,523

 
114,116

 
112,640

 
114,080

 
112,144

Diluted
118,206

 
117,398

 
116,052

 
117,540

 
115,833




Supplemental Reconciliation of GAAP to Non-GAAP Effective Tax Rate (1)

 
Three Months Ended
 
Nine Months Ended
 
September 30, 2014
 
June 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
 
 
 
 
 
 
 
 
 
 
GAAP effective tax rate
49
 %
 
56
 %
 
1,089
 %
 
48
 %
 
185
 %
Adjustment to GAAP effective tax rate
(13
)%
 
(20
)%
 
(1,053
)%
 
(12
)%
 
(149
)%
Non-GAAP effective tax rate
36
 %
 
36
 %
 
36
 %
 
36
 %
 
36
 %

(1)
For purposes of internal forecasting, planning and analyzing future periods that assume net income from operations, the Company estimates a fixed, long-term projected tax rate of approximately 36 percent, which consists of estimated U.S. federal and state tax rates, and excludes tax rates associated with certain items such as withholding tax, tax credits and deferred tax asset valuation allowance. Accordingly, the Company has applied the 36 percent tax rate to its non-GAAP financial results for all periods to assist the Company’s planning for future periods.



Rambus (NASDAQ:RMBS)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Rambus Charts.
Rambus (NASDAQ:RMBS)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Rambus Charts.