UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2003
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 000-22339
RAMBUS INC.
(Exact name of registrant as specified in its charter)
| Delaware | 94-3112828 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
4440 El Camino Real, Los Altos, CA 94022
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (650) 947-5000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes x No ¨
The number of shares outstanding of the registrant’s Common Stock, par value $.001 per share, was 97,909,754 as of July 14, 2003.
FORM 10-Q
INDEX
| PAGE | ||||
| PART I. |
FINANCIAL INFORMATION |
|||
| Item 1. |
Financial Statements: |
|||
| Consolidated Condensed Balance Sheets as of June 30, 2003 and December 31, 2002 |
1 | |||
| 2 | ||||
| 3 | ||||
| Notes to Unaudited Consolidated Condensed Financial Statements |
4 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
21 | ||
| Item 3. |
39 | |||
| Item 4. |
39 | |||
| PART II. |
OTHER INFORMATION |
|||
| Item 1. |
42 | |||
| Item 5. |
47 | |||
| Item 6. |
48 | |||
| 49 | ||||
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
RAMBUS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
| June 30, 2003 |
December 31, 2002 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 59,357 | $ | 28,656 | ||||
| Marketable securities |
37,907 | 36,081 | ||||||
| Accounts receivable |
3,935 | 1,080 | ||||||
| Prepaid and deferred taxes |
12,005 | 7,824 | ||||||
| Prepaids and other current assets |
5,575 | 2,648 | ||||||
| Total current assets |
118,779 | 76,289 | ||||||
| Property and equipment, net |
11,746 | 12,375 | ||||||
| Marketable securities, long-term |
89,174 | 111,095 | ||||||
| Restricted investments |
4,603 | 11,986 | ||||||
| Deferred taxes, long-term |
33,431 | 32,777 | ||||||
| Other assets |
3,010 | 6,001 | ||||||
| Total assets |
$ | 260,743 | $ | 250,523 | ||||
| LIABILITIES | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 3,714 | $ | 2,115 | ||||
| Accrued salaries and benefits |
3,242 | 2,936 | ||||||
| Other accrued liabilities |
4,304 | 5,335 | ||||||
| Deferred revenue |
22,692 | 22,218 | ||||||
| Total current liabilities |
33,952 | 32,604 | ||||||
| Deferred revenue, less current portion |
15,808 | 15,542 | ||||||
| Total liabilities |
49,760 | 48,146 | ||||||
| Commitments and contingencies (Notes 7 and 9) |
||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Convertible preferred stock, $.001 par value: |
||||||||
| Authorized: 5,000,000 shares; |
||||||||
| Issued and outstanding: no shares at June 30, 2003 and December 31, 2002 |
— | — | ||||||
| Common Stock, $.001 par value: |
||||||||
| Authorized: 500,000,000 shares; |
||||||||
| Issued and outstanding: 97,825,363 shares at June 30, 2003 and 97,542,210 shares at December 31, 2002 |
98 | 97 | ||||||
| Additional paid-in capital |
262,402 | 262,839 | ||||||
| Accumulated deficit |
(52,032 | ) | (61,628 | ) | ||||
| Accumulated other comprehensive income |
515 | 1,069 | ||||||
| Total stockholders’ equity |
210,983 | 202,377 | ||||||
| Total liabilities and stockholders’ equity |
$ | 260,743 | $ | 250,523 | ||||
See Notes to Unaudited Consolidated Condensed Financial Statements.
1
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||
| 2003 |
2002 |
2003 |
2002 | |||||||||
| Revenues: |
||||||||||||
| Contract revenues |
$ | 3,743 | $ | 1,507 | $ | 7,010 | $ | 3,229 | ||||
| Royalties |
25,452 | 22,183 | 50,264 | 43,992 | ||||||||
| Total revenues |
29,195 | 23,690 | 57,274 | 47,221 | ||||||||
| Costs and expenses: |
||||||||||||
| Cost of contract revenues |
3,348 | 1,786 | 6,558 | 3,628 | ||||||||
| Research and development (includes stock-based compensation of $0 in the three and six months ended June 30, 2003 and $0 and a credit of $230 in the three and six months ended June 30, 2002, respectively) |
8,136 | 5,844 | 15,403 | 11,070 | ||||||||
| Marketing, general and administrative |
12,374 | 8,411 | 25,505 | 16,161 | ||||||||
| Total costs and expenses |
23,858 | 16,041 | 47,466 | 30,859 | ||||||||
| Operating income |
5,337 | 7,649 | 9,808 | 16,362 | ||||||||
| Interest and other income, net |
1,321 | 1,423 | 4,305 | 3,092 | ||||||||
| Income before income taxes |
6,658 | 9,072 | 14,113 | 19,454 | ||||||||
| Provision for income taxes |
2,130 | 3,175 | 4,516 | 6,809 | ||||||||
| Net income |
$ | 4,528 | $ | 5,897 | $ | 9,597 | $ | 12,645 | ||||
| Net income per share—basic |
$ | 0.05 | $ | 0.06 | $ | 0.10 | $ | 0.13 | ||||
| Net income per share—diluted |
$ | 0.04 | $ | 0.06 | $ | 0.09 | $ | 0.12 | ||||
| Number of shares used in per share calculations: |
||||||||||||
| Basic |
97,414 | 99,511 | 97,286 | 99,709 | ||||||||
| Diluted |
105,498 | 101,761 | 104,652 | 102,350 | ||||||||
See Notes to Unaudited Consolidated Condensed Financial Statements.
2
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Six Months Ended June 30, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 9,597 | $ | 12,645 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Tax benefit of stock option exercises |
5,146 | 957 | ||||||
| Depreciation |
2,729 | 2,465 | ||||||
| Increase (decrease) in valuation allowance related to investments |
(1,231 | ) | 1,991 | |||||
| Gain on sale of securities |
— | (2,022 | ) | |||||
| Amortization of deferred compensation |
— | (230 | ) | |||||
| Amortization of goodwill |
— | 133 | ||||||
| Change in operating assets and liabilities: |
||||||||
| Accounts receivable |
(2,855 | ) | 78 | |||||
| Prepaids, deferred taxes and other assets |
(7,597 | ) | 2,347 | |||||
| Accounts and taxes payable, accrued salaries and benefits and other accrued liabilities |
873 | 662 | ||||||
| Increases in deferred revenue |
21,650 | 1,639 | ||||||
| Decreases in deferred revenue |
(20,910 | ) | (7,094 | ) | ||||
| Net cash provided by operating activities |
7,402 | 13,571 | ||||||
| Cash flows from investing activities: |
||||||||
| Purchases of property and equipment |
(2,100 | ) | (730 | ) | ||||
| Purchases of marketable securities |
(167,630 | ) | (120,341 | ) | ||||
| Maturities of marketable securities |
187,178 | 117,939 | ||||||
| Decrease (increase) in restricted investments |
7,383 | (568 | ) | |||||
| Proceeds from investment |
4,457 | 2,581 | ||||||
| Purchase of investment |
(400 | ) | — | |||||
| Net cash (used in) provided by investing activities |
28,888 | (1,119 | ) | |||||
| Cash flows from financing activities: |
||||||||
| Net proceeds from issuance of Common Stock |
9,121 | 1,898 | ||||||
| Repurchase of Common Stock |
(14,703 | ) | (12,916 | ) | ||||
| Net cash used in financing activities |
(5,582 | ) | (11,018 | ) | ||||
| Effect of exchange rates on cash and cash equivalents |
(7 | ) | 83 | |||||
| Net increase in cash and cash equivalents |
30,701 | 1,517 | ||||||
| Cash and cash equivalents at beginning of period |
28,656 | 29,465 | ||||||
| Cash and cash equivalents at end of period |
$ | 59,357 | $ | 30,982 | ||||
| Non-Cash disclosure |
||||||||
| Intellectual property rights received on disposition | ||||||||