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Rambus Posts Q4 Loss On Higher Expenses

2/4/2008 6:19:34 PM Rambus Inc. (RMBS), a developer of chip interface technologies, on Monday reported a net loss for the fourth quarter, compared to profit in the year-ago period, hurt by higher expenses, while revenues declined 22.9%.

The Los Altos, California-based company reported a fourth quarter net loss of $14.6 million or $0.14 per share, compared to net income of $2.1 million or $0.02 per share for the fourth quarter of 2006.

The latest results included $16.4 million of stock-based compensation expenses, $0.8 million of restatement and related legal expenses and $3.0 million of severance expenses, as well as General litigation expenses of $16.1 million. The previous year's results included $9.7 million of stock-based compensation and $5.7 million of restatement and related legal expenses, in addition to general litigation expenses of $5.2 million.

Rambus has been involved in several litigations. In August 2007, the European Commission issued a Statement of Objections against the company, alleging violations of European Union competition law. Several DRAM manufacturers have complained about Rambus' 1992-1995 participation in an industry standard-setting organization called the Joint Electron Device Engineering Council. Earlier in 2007, Federal Trade Commission ordered the company about restrictions with respect to patent royalties on some widely used memory-chip technology.

Revenues declined to $40.5 million from $52.59 million in the prior year period. Contract revenue plunged to $4.49 million from $8.58 million, while Royalty revenue dipped to $36.04 million from $44.01 million.

In December 2007, Rambus lowered its fourth quarter revenue outlook due to extended contract negotiations for new license agreements. The company said the negotiations were originally expected to complete in that quarter itself.

Total costs and expenses for the fourth quarter increased to $72.6 million from $53.2 million in the previous year.

Cash and cash equivalents at the end of December 31, 2007 was $119.39 million, while they were $73.30 million as of December 31, 2006. Accounts receivable for the two periods were $442 thousand and $846 thousand, respectively.

For the third quarter, the company reported a narrower net loss on reduced legal costs and expenses despite a 9.2% fall in total revenues. The company reported a net loss of $6.5 million or $0.06 loss per share, narrower than $22.6 million or $0.22 loss per share in the same quarter last year but wider than $2.7 million or $0.03 loss per share in the second quarter of 2007. Total revenues slipped to $41.72 million from $45.95 million in the previous year quarter.

Net loss for fiscal year 2007 widened to $27.7 million or $0.27 per share from $13.82 million or $0.13 per share in the year before. Full year revenues dipped to $179.94 million from $195.32 million.

Commenting on the results, Harold Hughes, president and chief executive officer of Rambus, said: “We faced a number of extraordinary challenges in 2007, many of which had an impact on our revenue results. Nevertheless, we enter the new year with some good momentum as illustrated by our first HDTV win for the XDR memory architecture at Toshiba, as well as Qimonda's news that it is now shipping samples of XDR DRAM, expanding the supply base for the world's fastest memory.”

Among others in the industry, Micron Technology Inc. (MU) in December 2007 reported a first quarter net loss, compared to profit in the year-ago period, as selling prices fell below the cost of production. Net sales for the quarter edged up to $1.535 billion from $1.530 billion.
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