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.
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.
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.
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, deferred tax asset valuation allowance and the release of any 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 impairments and 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’ restructuring and plan of termination and expectations regarding revenue for the fourth quarter of 2015 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
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Rambus Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
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September 30, 2015 |
December 31, 2014 |
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| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 216,553 | $ | 154,126 | ||||||||||
| Marketable securities | 146,325 | 145,983 | ||||||||||||
| Accounts receivable | 10,314 | 6,001 | ||||||||||||
| Prepaids and other current assets | 10,859 | 8,541 | ||||||||||||
| Deferred taxes | 17,896 | 187 | ||||||||||||
| Total current assets | 401,947 | 314,838 | ||||||||||||
| Intangible assets, net | 70,426 | 89,371 | ||||||||||||
| Goodwill | 116,899 | 116,899 | ||||||||||||
| Property, plant and equipment, net | 59,077 | 64,023 | ||||||||||||
| Deferred taxes, long-term | 143,834 | 536 | ||||||||||||
| Other assets | 3,690 | 2,612 | ||||||||||||
| Total assets | $ | 795,873 | $ | 588,279 | ||||||||||
| LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 5,928 | $ | 6,962 | ||||||||||
| Accrued salaries and benefits | 9,362 | 14,840 | ||||||||||||
| Other accrued liabilities | 12,320 | 12,856 | ||||||||||||
| Total current liabilities | 27,610 | 34,658 | ||||||||||||
| Long-term liabilities: | ||||||||||||||
| Convertible notes, long-term | 119,414 | 115,089 | ||||||||||||
| Long-term imputed financing obligation | 38,751 | 39,063 | ||||||||||||
| Other long-term liabilities | 4,242 | 7,847 | ||||||||||||
| Total long-term liabilities | 162,407 | 161,999 | ||||||||||||
| Total stockholders’ equity | 605,856 | 391,622 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 795,873 | $ | 588,279 | ||||||||||
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Rambus Inc. Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) |
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Three Months Ended
September 30, |
Nine Months Ended
September 30, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||
| Royalties | $ | 66,823 | $ | 64,009 | $ | 196,173 | $ | 207,387 | ||||||||||||||||||||
| Contract and other revenue | 6,956 | 5,703 | 23,332 | 17,131 | ||||||||||||||||||||||||
| Total revenue | 73,779 | 69,712 | 219,505 | 224,518 | ||||||||||||||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||||||||||
| Cost of revenue (1) | 11,111 | 10,540 | 34,004 | 31,199 | ||||||||||||||||||||||||
| Research and development (1) | 27,784 | 27,014 | 85,506 | 81,580 | ||||||||||||||||||||||||
| Sales, general and administrative (1) | 17,860 | 18,200 | 53,701 | 55,639 | ||||||||||||||||||||||||
| Gain from sale of intellectual property | (106 | ) | — | (3,262 | ) | (170 | ) | |||||||||||||||||||||
| Gain from settlement | (510 | ) | (510 | ) | (1,530 | ) | (1,530 | ) | ||||||||||||||||||||
| Restructuring charges | — | — | — | 39 | ||||||||||||||||||||||||
| Total operating costs and expenses | 56,139 | 55,244 | 168,419 | 166,757 | ||||||||||||||||||||||||
| Operating income | 17,640 | 14,468 | 51,086 | 57,761 | ||||||||||||||||||||||||
| Interest income and other income (expense), net | 539 | (549 | ) | 874 | (432 | ) | ||||||||||||||||||||||
| Interest expense | (3,117 | ) | (3,059 | ) | (9,291 | ) | (21,755 | ) | ||||||||||||||||||||
| Interest and other income (expense), net | (2,578 | ) | (3,608 | ) | (8,417 | ) | (22,187 | ) | ||||||||||||||||||||
| Income before income taxes | 15,062 | 10,860 | 42,669 | 35,574 | ||||||||||||||||||||||||
| Provision for (benefit from) income taxes | (166,971 | ) | 5,347 | (155,727 | ) | 17,214 | ||||||||||||||||||||||
| Net income | $ | 182,033 | $ | 5,513 | $ | 198,396 | $ | 18,360 | ||||||||||||||||||||
| Net income per share: | ||||||||||||||||||||||||||||
| Basic | $ | 1.56 | $ | 0.05 | $ | 1.71 | $ | 0.16 | ||||||||||||||||||||
| Diluted | $ | 1.52 | $ | 0.05 | $ | 1.67 | $ | 0.16 | ||||||||||||||||||||
| Weighted average shares used in per share calculation | ||||||||||||||||||||||||||||
| Basic | 116,444 | 114,523 | 115,940 | 114,080 | ||||||||||||||||||||||||
| Diluted | 119,542 | 118,206 | 118,997 | 117,540 | ||||||||||||||||||||||||
