Rambus Reports Fourth Quarter and Year-End Financial Results

Revenue of $30.8 million and loss per share of $0.22 cents for the fourth quarter; revenue of $113.0 million and loss per share of $0.88 cents for the year

LOS ALTOS, Calif. -- Jan 28, 2010  -- Rambus Inc. (NASDAQ:RMBS), one of the world's premier technology licensing companies specializing in high-speed memory architectures, today reported financial results for the fourth quarter and the fiscal year ended December 31, 2009.

Revenue for the fourth quarter of 2009 was $30.8 million, up 10.6% sequentially from the third quarter of 2009 primarily due to higher variable royalty revenue. As compared to the fourth quarter of 2008, revenue was down 18.1% primarily due to the receipt of the previously withheld royalties related to the now vacated Federal Trade Commission ("FTC") order in the fourth quarter of 2008. Revenue for fiscal year 2009 was $113.0 million, down 20.7% over the last fiscal year primarily due to the expiration of the Elpida licensing agreement in the first quarter of 2008.

"We finished the year with good revenue momentum in the fourth quarter thanks to stronger patent and technology royalties from consumer electronics shipments," said Harold Hughes, president and chief executive officer at Rambus. "The agreement signed last week with Samsung Electronics is transformational for Rambus and will accelerate the market adoption of our patented innovations and leadership products."

Total costs and expenses for the fourth quarter of 2009 were $47.5 million, which included $7.6 million of stock-based compensation expenses and $0.5 million for previous stock-based compensation restatement and related legal expenses. This is compared to total costs and expenses of $48.5 million for the third quarter of 2009, which included $7.7 million of stock-based compensation expenses and $0.1 million for previous stock-based compensation restatement and related legal expenses. General litigation expenses for the fourth quarter were $10.6 million, a decrease of $1.4 million from the third quarter of 2009. Total costs and expenses in the fourth quarter of last year were $55.6 million, which included $8.7 million of stock-based compensation expenses, $0.2 million of restructuring-related expenses and a net recovery of $0.3 million of previous stock-based compensation restatement and related legal expenses. General litigation expenses in the fourth quarter of 2009 decreased $7.1 million from the fourth quarter of 2008.

Total costs and expenses for year ended December 31, 2009 were $188.9 million, which included $31.6 million of stock-based compensation expenses and a net recovery of $13.5 million for previous stock-based compensation restatement and related legal expenses. This is compared to total costs and expenses of $231.2 million for fiscal year 2008, which included $37.2 million of stock-based compensation expenses, $4.2 million of restructuring-related expenses, $2.2 million of asset impairment expenses and $3.3 million of previous stock-based compensation restatement and related legal expenses. General litigation expenses for fiscal year 2009 were $55.5 million, a decrease of $0.2 million from fiscal year 2008.

Interest and other expense, net, for the fourth quarter of 2009 was $7.2 million as compared to $6.8 million in the third quarter of 2009 and interest and other income, net, of $2.0 million in the fourth quarter of 2008 which included $2.5 million in gain from the repurchase of convertible notes. Interest and other expense, net, for fiscal year 2009 was $16.9 million as compared to interest and other income, net, of $3.4 million for fiscal year 2008. Prior periods have been adjusted to reflect the impact of the adoption on January 1, 2009 of a FASB staff position which clarifies the accounting for convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement. The Company has retrospectively adjusted the income statement to include non-cash interest expense of $3.0 million for the fourth quarter of 2008, $11.8 million for fiscal year 2008 and reduce the gain from the repurchase of the convertible notes from $4.4 million to $2.5 million for the fourth quarter and fiscal year ended 2008.

Net loss for the fourth quarter of 2009 was $23.3 million as compared to a net loss of $27.5 million in the third quarter of 2009 and a net loss of $15.5 million (adjusted for adoption of the FASB staff position) in the fourth quarter of 2008. Net loss per share for the fourth quarter of 2009 was $0.22 as compared to a net loss per share of $0.26 in the third quarter of 2009 and a net loss per share of $0.15 (adjusted for adoption of the FASB staff position) for the fourth quarter of 2008. Net loss for fiscal year 2009 was $92.2 million as compared to a net loss of $199.1 million (adjusted for adoption of the FASB staff position) for fiscal year 2008. Net loss per share for fiscal year 2009 was $0.88 as compared to a net loss per share of $1.90 (adjusted for adoption of the FASB staff position) in fiscal year 2008.

Cash, cash equivalents, and marketable securities as of December 31, 2009 were $460.2 million, down approximately $38.3 million from September 30, 2009 and up approximately $114.3 million from December 31, 2008. During fiscal year 2009, the Company received approximately $168.2 million net proceeds related to the issuance of the 5% Convertible Senior Notes due 2014, $7.3 million of insurance proceeds related to reimbursement claims associated with the stock option investigation and derivative lawsuits as well as $4.5 million from former executives due to the resolution of the derivative lawsuits offset by cash used to acquire technology and a portfolio of advanced lighting and optoelectronics patents from Global Lighting Technologies Inc. of $26.0 million and other intangible assets of $2.5 million as well as $4.0 million of interest payment related to the 5% Convertible Senior Notes due 2014.

The conference call discussing 2009 fourth quarter and year-end results will be webcast live via the Rambus Investor Relations website (http://investor.rambus.com) at 2:00 p.m. Pacific Time today. A replay will be available following the call on Rambus' Investor Relations website and for one week at the following numbers: (888) 203-1112 (domestic) or (719) 457-0820 (international) with ID# 4989652.

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About Rambus Inc.

Rambus is one of the world's premier technology licensing companies specializing in the invention and design of high-speed memory architectures. Additional information is available at www.rambus.com.