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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Rambus Inc | NASDAQ:RMBS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
1.83 | 3.37% | 56.08 | 50.57 | 65.00 | 56.41 | 55.30 | 55.90 | 1,289,791 | 05:00:07 |
Delaware
|
|
94-3112828
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
1050 Enterprise Way, Suite 700
Sunnyvale, California
|
|
|
|
94089
|
(Address of principal executive offices)
|
|
|
|
(ZIP Code)
|
Large accelerated filer
ý
|
|
Accelerated filer
o
|
|
|
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
o
|
|
PAGE
|
Condensed Consolidated Balance Sheets as of
June 30, 2014 and December 31, 2013
|
|
Condensed Consolidated Statements of Operations for the three
and six months ended June 30, 2014 and 2013
|
|
Condensed Consolidated Statements of Comprehensive
Income (Loss) for the three and six months ended June 30, 2014 and 2013
|
|
Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 2014 and 2013
|
|
•
|
Success in the markets of our products and services or our customers’ products;
|
•
|
Sources of competition;
|
•
|
Research and development costs and improvements in technology;
|
•
|
Sources, amounts and concentration of revenue, including royalties;
|
•
|
Success in signing and renewing license agreements;
|
•
|
Terms of our licenses and amounts owed under license agreements;
|
•
|
Technology product development;
|
•
|
Dispositions, acquisitions, mergers or strategic transactions and our related integration efforts;
|
•
|
Impairment of goodwill and long-lived assets;
|
•
|
Pricing policies of our customers;
|
•
|
Changes in our strategy and business model, including the expansion of our portfolio of inventions and solutions to address additional markets in lighting, chip and system security;
|
•
|
Deterioration of financial health of commercial counterparties and their ability to meet their obligations to us;
|
•
|
Engineering, marketing and general and administration expenses;
|
•
|
Contract revenue;
|
•
|
Operating results;
|
•
|
International licenses and operations;
|
•
|
Effects of changes in the economy and credit market on our industry and business;
|
•
|
Ability to identify, attract, motivate and retain qualified personnel;
|
•
|
Growth in our business;
|
•
|
Methods, estimates and judgments in accounting policies;
|
•
|
Adoption of new accounting pronouncements;
|
•
|
Effective tax rates;
|
•
|
Realization of deferred tax assets/release of deferred tax valuation allowance;
|
•
|
Trading price of our common stock;
|
•
|
Internal control environment;
|
•
|
The level and terms of our outstanding debt;
|
•
|
Litigation expenses;
|
•
|
Protection of intellectual property;
|
•
|
Indemnification and technical support obligations;
|
•
|
Issuances of our securities, which could involve restrictive covenants or be dilutive to our existing stockholders;
|
•
|
Outcome and effect of current and potential future intellectual property litigation and other significant litigation; and
|
•
|
Likelihood of paying dividends or repurchasing securities.
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
|
(In thousands, except shares
and par value)
|
||||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
99,571
|
|
|
$
|
338,696
|
|
Marketable securities
|
146,859
|
|
|
48,966
|
|
||
Accounts receivable
|
12,503
|
|
|
2,251
|
|
||
Prepaids and other current assets
|
7,283
|
|
|
8,253
|
|
||
Deferred taxes
|
1,069
|
|
|
205
|
|
||
Total current assets
|
267,285
|
|
|
398,371
|
|
||
Intangible assets, net
|
102,435
|
|
|
117,172
|
|
||
Goodwill
|
116,899
|
|
|
116,899
|
|
||
Property, plant and equipment, net
|
67,411
|
|
|
72,642
|
|
||
Deferred taxes, long-term
|
571
|
|
|
4,797
|
|
||
Other assets
|
3,090
|
|
|
3,498
|
|
||
Total assets
|
$
|
557,691
|
|
|
$
|
713,379
|
|
LIABILITIES &
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
5,465
|
|
|
$
|
7,001
|
|
Accrued salaries and benefits
|
14,410
|
|
|
33,448
|
|
||
Convertible notes, short-term
|
—
|
|
|
164,047
|
|
||
Other current liabilities
|
10,310
|
|
|
8,346
|
|
||
Total current liabilities
|
30,185
|
|
|
212,842
|
|
||
Convertible notes, long-term
|
112,316
|
|
|
109,629
|
|
||
Long-term imputed financing obligation
|
39,232
|
|
|
39,349
|
|
||
Long-term income taxes payable
|
1,789
|
|
|
6,561
|
|
||
Other long-term liabilities
|
7,863
|
|
|
4,769
|
|
||
Total liabilities
|
191,385
|
|
|
373,150
|
|
||
Commitments and contingencies (Notes 9 and 14)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Convertible preferred stock, $.001 par value:
|
|
|
|
|
|
||
Authorized: 5,000,000 shares
|
|
|
|
|
|
||
Issued and outstanding: no shares at June 30, 2014 and December 31, 2013
|
—
|
|
|
—
|
|
||
Common stock, $.001 par value:
|
|
|
|
|
|
||
Authorized: 500,000,000 shares
|
|
|
|
|
|
||
Issued and outstanding: 114,384,666 shares at June 30, 2014 and 113,459,390 shares at December 31, 2013
|
114
|
|
|
113
|
|
||
Additional paid-in capital
|
1,141,428
|
|
|
1,128,148
|
|
||
Accumulated deficit
|
(774,880
|
)
|
|
(787,727
|
)
|
||
Accumulated other comprehensive loss
|
(356
|
)
|
|
(305
|
)
|
||
Total stockholders’ equity
|
366,306
|
|
|
340,229
|
|
||
Total liabilities and stockholders’ equity
|
$
|
557,691
|
|
|
$
|
713,379
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Royalties
|
$
|
69,741
|
|
|
$
|
57,009
|
|
|
$
|
143,378
|
|
|
$
|
123,231
|
|
Contract and other revenue
|
6,777
|
|
|
910
|
|
|
11,428
|
|
|
1,554
|
|
||||
Total revenue
|
76,518
|
|
|
57,919
|
|
|
154,806
|
|
|
124,785
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue*
|
10,637
|
|
|
7,365
|
|
|
20,659
|
|
|
13,899
|
|
||||
Research and development*
|
27,668
|
|
|
30,777
|
|
|
54,566
|
|
|
63,625
|
|
||||
Marketing, general and administrative*
|
18,619
|
|
|
14,136
|
|
|
37,439
|
|
|
39,258
|
|
||||
Gain from sale of intellectual property
|
—
|
|
|
(103
|
)
|
|
(170
|
)
|
|
(1,388
|
)
|
||||
Restructuring charges
|
—
|
|
|
—
|
|
|
39
|
|
|
2,206
|
|
||||
Gain from settlement
|
(510
|
)
|
|
—
|
|
|
(1,020
|
)
|
|
—
|
|
||||
Total operating costs and expenses
|
56,414
|
|
|
52,175
|
|
|
111,513
|
|
|
117,600
|
|
||||
Operating income
|
20,104
|
|
|
5,744
|
|
|
43,293
|
|
|
7,185
|
|
||||
Interest income and other income (expense), net
|
104
|
|
|
(1,419
|
)
|
|
117
|
|
|
(1,439
|
)
|
||||
Interest expense
|
(8,770
|
)
|
|
(7,426
|
)
|
|
(18,696
|
)
|
|
(14,738
|
)
|
||||
Interest and other income (expense), net
|
(8,666
|
)
|
|
(8,845
|
)
|
|
(18,579
|
)
|
|
(16,177
|
)
|
||||
Income (loss) before income taxes
|
11,438
|
|
|
(3,101
|
)
|
|
24,714
|
|
|
(8,992
|
)
|
||||
Provision for income taxes
|
6,395
|
|
|
4,743
|
|
|
11,867
|
|
|
9,254
|
|
||||
Net income (loss)
|
$
|
5,043
|
|
|
$
|
(7,844
|
)
|
|
$
|
12,847
|
|
|
$
|
(18,246
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.04
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.16
|
)
|
Diluted
|
$
|
0.04
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.16
|
)
|
Weighted average shares used in per share calculation:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
114,116
|
|
|
112,183
|
|
|
113,854
|
|
|
111,892
|
|
||||
Diluted
|
117,398
|
|
|
112,183
|
|
|
116,733
|
|
|
111,892
|
|
Cost of revenue
|
$
|
15
|
|
|
$
|
5
|
|
|
$
|
22
|
|
|
$
|
5
|
|
Research and development
|
$
|
2,615
|
|
|
$
|
1,660
|
|
|
$
|
3,926
|
|
|
$
|
3,536
|
|
Marketing, general and administrative
|
$
|
2,225
|
|
|
$
|
1,909
|
|
|
$
|
3,806
|
|
|
$
|
4,981
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(In thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income (loss)
|
|
$
|
5,043
|
|
|
$
|
(7,844
|
)
|
|
$
|
12,847
|
|
|
$
|
(18,246
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain (loss) on marketable securities, net of tax
|
|
(59
|
)
|
|
18
|
|
|
(51
|
)
|
|
4
|
|
||||
Total comprehensive income (loss)
|
|
$
|
4,984
|
|
|
$
|
(7,826
|
)
|
|
$
|
12,796
|
|
|
$
|
(18,242
|
)
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2014
|
|
2013
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income (loss)
|
$
|
12,847
|
|
|
$
|
(18,246
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||
Stock-based compensation
|
7,754
|
|
|
8,522
|
|
||
Depreciation
|
6,979
|
|
|
7,671
|
|
||
Amortization of intangible assets
|
13,554
|
|
|
14,037
|
|
||
Non-cash interest expense and amortization of convertible debt issuance costs
|
11,711
|
|
|
8,234
|
|
||
Impairment of investment in non-marketable equity security
|
—
|
|
|
1,400
|
|
||
Deferred income taxes
|
5,941
|
|
|
875
|
|
||
Non-cash restructuring
|
—
|
|
|
653
|
|
||
Gain from sale of intellectual property
|
(170
|
)
|
|
(1,388
|
)
|
||
Change in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||
Accounts receivable
|
(10,252
|
)
|
|
(474
|
)
|
||
Prepaid expenses and other assets
|
(1,283
|
)
|
|
3,163
|
|
||
Accounts payable
|
756
|
|
|
(865
|
)
|
||
Accrued salaries and benefits and other liabilities
|
(17,401
|
)
|
|
(18,965
|
)
|
||
Income taxes payable
|
(3,982
|
)
|
|
544
|
|
||
Net cash provided by operating activities
|
26,454
|
|
|
5,161
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property, plant and equipment
|
(4,293
|
)
|
|
(5,309
|
)
|
||
Acquisition of intangible assets
|
—
|
|
|
(2,500
|
)
|
||
Purchases of marketable securities
|
(166,070
|
)
|
|
(60,496
|
)
|
||
Maturities of marketable securities
|
51,428
|
|
|
64,250
|
|
||
Proceeds from sale of marketable securities
|
17,689
|
|
|
—
|
|
||
Proceeds from sale of intellectual property
|
2,500
|
|
|
2,250
|
|
||
Net cash used in investing activities
|
(98,746
|
)
|
|
(1,805
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds received from issuance of common stock under employee stock plans
|
5,855
|
|
|
3,054
|
|
||
Principal payments against lease financing obligation
|
(132
|
)
|
|
(62
|
)
|
||
Payments under installment payment arrangement
|
(56
|
)
|
|
(56
|
)
|
||
Repayment of convertible senior notes
|
(172,500
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
(166,833
|
)
|
|
2,936
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(239,125
|
)
|
|
6,292
|
|
||
Cash and cash equivalents at beginning of period
|
338,696
|
|
|
148,984
|
|
||
Cash and cash equivalents at end of period
|
$
|
99,571
|
|
|
$
|
155,276
|
|
|
|
|
|
||||
Non-cash investing and financing activities during the period:
|
|
|
|
|
|
||
Property, plant and equipment received and accrued in accounts payable and other liabilities
|
$
|
166
|
|
|
$
|
112
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income (loss) per share:
|
|
(In thousands, except per share amounts)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
5,043
|
|
|
$
|
(7,844
|
)
|
|
$
|
12,847
|
|
|
$
|
(18,246
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding - basic
|
|
114,116
|
|
|
112,183
|
|
|
113,854
|
|
|
111,892
|
|
||||
Effect of potential dilutive common shares
|
|
3,282
|
|
|
—
|
|
|
2,879
|
|
|
—
|
|
||||
Weighted-average shares outstanding - diluted
|
|
117,398
|
|
|
112,183
|
|
|
116,733
|
|
|
111,892
|
|
||||
Basic net income (loss) per share
|
|
$
|
0.04
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.16
|
)
|
Diluted net income (loss) per share
|
|
$
|
0.04
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.16
|
)
|
Reportable Segment:
|
|
As of December 31, 2013
|
|
Additions to Goodwill
|
|
Impairment Charge of Goodwill
|
|
As of June 30, 2014
|
||||||||
|
|
(In thousands)
|
||||||||||||||
MID
|
|
$
|
19,905
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,905
|
|
CTO
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
CRI
|
|
96,994
|
|
|
—
|
|
|
—
|
|
|
96,994
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
116,899
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116,899
|
|
|
|
As of
|
||||||||||
|
|
June 30, 2014
|
||||||||||
Reportable Segment:
|
|
Gross Carrying Amount
|
|
Accumulated Impairment Losses
|
|
Net Carrying Amount
|
||||||
|
|
(In thousands)
|
||||||||||
MID
|
|
$
|
19,905
|
|
|
$
|
—
|
|
|
$
|
19,905
|
|
CTO
|
|
8,070
|
|
|
(8,070
|
)
|
|
—
|
|
|||
CRI
|
|
96,994
|
|
|
—
|
|
|
96,994
|
|
|||
Other
|
|
13,700
|
|
|
(13,700
|
)
|
|
—
|
|
|||
Total
|
|
$
|
138,669
|
|
|
$
|
(21,770
|
)
|
|
$
|
116,899
|
|
|
|
|
As of June 30, 2014
|
||||||||||
|
Useful Life
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
|
|
|
(In thousands)
|
||||||||||
Existing technology
|
3 to 10 years
|
|
$
|
185,321
|
|
|
$
|
(92,598
|
)
|
|
$
|
92,723
|
|
Customer contracts and contractual relationships
|
1 to 10 years
|
|
31,093
|
|
|
(21,381
|
)
|
|
9,712
|
|
|||
Non-compete agreements
|
3 years
|
|
300
|
|
|
(300
|
)
|
|
—
|
|
|||
Total intangible assets
|
|
|
$
|
216,714
|
|
|
$
|
(114,279
|
)
|
|
$
|
102,435
|
|
|
|
|
As of December 31, 2013
|
||||||||||
|
Useful Life
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
|
|
|
(In thousands)
|
||||||||||
Existing technology
|
3 to 10 years
|
|
$
|
186,202
|
|
|
$
|
(80,961
|
)
|
|
$
|
105,241
|
|
Customer contracts and contractual relationships
|
1 to 10 years
|
|
31,093
|
|
|
(19,204
|
)
|
|
11,889
|
|
|||
Non-compete agreements
|
3 years
|
|
300
|
|
|
(258
|
)
|
|
42
|
|
|||
Total intangible assets
|
|
|
$
|
217,595
|
|
|
$
|
(100,423
|
)
|
|
$
|
117,172
|
|
Years Ending December 31:
|
Amount
|
||
2014 (remaining 6 months)
|
$
|
13,063
|
|
2015
|
25,098
|
|
|
2016
|
24,318
|
|
|
2017
|
23,709
|
|
|
2018
|
10,827
|
|
|
Thereafter
|
5,420
|
|
|
|
$
|
102,435
|
|
|
For the Three Months Ended June 30, 2014
|
|
For the Six Months Ended June 30, 2014
|
||||||||||||||||||||||||||||||||||||
|
MID
|
|
CRI
|
|
CTO
|
|
Other
|
|
Total
|
|
MID
|
|
CRI
|
|
CTO
|
|
Other
|
|
Total
|
||||||||||||||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Revenues
|
$
|
58,664
|
|
|
$
|
12,771
|
|
|
$
|
—
|
|
|
$
|
5,083
|
|
|
$
|
76,518
|
|
|
$
|
119,820
|
|
|
$
|
25,674
|
|
|
$
|
—
|
|
|
$
|
9,312
|
|
|
$
|
154,806
|
|
Segment operating expenses
|
9,517
|
|
|
8,290
|
|
|
4,518
|
|
|
4,675
|
|
|
27,000
|
|
|
19,437
|
|
|
15,919
|
|
|
8,789
|
|
|
9,057
|
|
|
53,202
|
|
||||||||||
Segment operating income (loss)
|
$
|
49,147
|
|
|
$
|
4,481
|
|
|
$
|
(4,518
|
)
|
|
$
|
408
|
|
|
$
|
49,518
|
|
|
$
|
100,383
|
|
|
$
|
9,755
|
|
|
$
|
(8,789
|
)
|
|
$
|
255
|
|
|
$
|
101,604
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
(29,414
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(58,311
|
)
|
||||||||||||||
Operating income
|
|
|
|
|
|
|
|
|
|
|
$
|
20,104
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
43,293
|
|
||||||||||||
Interest and other income (expense), net
|
|
|
|
|
|
|
|
|
|
|
(8,666
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(18,579
|
)
|
||||||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
11,438
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
24,714
|
|
|
For the Three Months Ended June 30, 2013
|
|
For the Six Months Ended June 30, 2013
|
||||||||||||||||||||||||||||||||||||
|
MID
|
|
CRI
|
|
CTO
|
|
Other
|
|
Total
|
|
MID
|
|
CRI
|
|
CTO
|
|
Other
|
|
Total
|
||||||||||||||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Revenues
|
$
|
49,456
|
|
|
$
|
7,914
|
|
|
$
|
—
|
|
|
$
|
549
|
|
|
$
|
57,919
|
|
|
$
|
109,131
|
|
|
$
|
14,797
|
|
|
$
|
—
|
|
|
$
|
857
|
|
|
$
|
124,785
|
|
Segment operating expenses
|
10,344
|
|
|
6,072
|
|
|
6,347
|
|
|
4,908
|
|
|
27,671
|
|
|
20,228
|
|
|
10,960
|
|
|
13,518
|
|
|
8,537
|
|
|
53,243
|
|
||||||||||
Segment operating income (loss)
|
$
|
39,112
|
|
|
$
|
1,842
|
|
|
$
|
(6,347
|
)
|
|
$
|
(4,359
|
)
|
|
$
|
30,248
|
|
|
$
|
88,903
|
|
|
$
|
3,837
|
|
|
$
|
(13,518
|
)
|
|
$
|
(7,680
|
)
|
|
$
|
71,542
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
(24,504
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(64,357
|
)
|
||||||||||||||
Operating income
|
|
|
|
|
|
|
|
|
|
|
$
|
5,744
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,185
|
|
||||||||||||
Interest and other income (expense), net
|
|
|
|
|
|
|
|
|
|
|
(8,845
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(16,177
|
)
|
||||||||||||||
Loss before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
(3,101
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(8,992
|
)
|
Customer
|
|
June 30, 2014
|
|
December 31, 2013
|
Customer 1 (MID and CRI reportable segments)
|
|
68%
|
|
*
|
Customer 2 (Other reportable segment)
|
|
25%
|
|
74%
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
June 30,
|
|
June 30,
|
||||||||
Customer
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Customer A (MID and CRI reportable segments)
|
|
20
|
%
|
|
39
|
%
|
|
19
|
%
|
|
36
|
%
|
Customer B (MID reportable segment)
|
|
15
|
%
|
|
*
|
|
|
15
|
%
|
|
*
|
|
Customer C (MID reportable segment)
|
|
13
|
%
|
|
*
|
|
|
13
|
%
|
|
*
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(In thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
South Korea
|
|
$
|
26,946
|
|
|
$
|
22,502
|
|
|
$
|
53,799
|
|
|
$
|
44,527
|
|
USA
|
|
27,898
|
|
|
15,106
|
|
|
56,572
|
|
|
40,675
|
|
||||
Japan
|
|
7,388
|
|
|
12,261
|
|
|
16,643
|
|
|
26,869
|
|
||||
Europe
|
|
4,276
|
|
|
5,432
|
|
|
12,839
|
|
|
7,560
|
|
||||
Canada
|
|
1,787
|
|
|
1,862
|
|
|
3,611
|
|
|
3,648
|
|
||||
Asia-Other
|
|
8,223
|
|
|
756
|
|
|
11,342
|
|
|
1,506
|
|
||||
Total
|
|
$
|
76,518
|
|
|
$
|
57,919
|
|
|
$
|
154,806
|
|
|
$
|
124,785
|
|
|
|
As of June 30, 2014
|
|||||||||||||||||
(In thousands)
|
|
Fair Value
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Weighted
Rate of
Return
|
|||||||||
Money market funds
|
|
$
|
79,522
|
|
|
$
|
79,522
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
0.01
|
%
|
Corporate notes, bonds and commercial paper
|
|
146,859
|
|
|
146,927
|
|
|
—
|
|
|
(68
|
)
|
|
0.17
|
%
|
||||
Total cash equivalents and marketable securities
|
|
226,381
|
|
|
226,449
|
|
|
—
|
|
|
(68
|
)
|
|
|
|
||||
Cash
|
|
20,049
|
|
|
20,049
|
|
|
—
|
|
|
—
|
|
|
|
|
||||
Total cash, cash equivalents and marketable securities
|
|
$
|
246,430
|
|
|
$
|
246,498
|
|
|
$
|
—
|
|
|
$
|
(68
|
)
|
|
|
|
|
|
As of December 31, 2013
|
|||||||||||||||||
(In thousands)
|
|
Fair Value
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Weighted
Rate of
Return
|
|||||||||
Money market funds
|
|
$
|
300,605
|
|
|
$
|
300,605
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
0.01
|
%
|
Corporate notes, bonds and commercial paper
|
|
58,492
|
|
|
58,507
|
|
|
—
|
|
|
(15
|
)
|
|
0.15
|
%
|
||||
Total cash equivalents and marketable securities
|
|
359,097
|
|
|
359,112
|
|
|
—
|
|
|
(15
|
)
|
|
|
|
||||
Cash
|
|
28,565
|
|
|
28,565
|
|
|
—
|
|
|
—
|
|
|
|
|
||||
Total cash, cash equivalents and marketable securities
|
|
$
|
387,662
|
|
|
$
|
387,677
|
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
|
|
|
As of
|
||||||
|
June 30,
2014 |
|
December 31,
2013 |
||||
|
(In thousands)
|
||||||
Cash equivalents
|
$
|
79,522
|
|
|
$
|
310,131
|
|
Short term marketable securities
|
146,859
|
|
|
48,966
|
|
||
Total cash equivalents and marketable securities
|
226,381
|
|
|
359,097
|
|
||
Cash
|
20,049
|
|
|
28,565
|
|
||
Total cash, cash equivalents and marketable securities
|
$
|
246,430
|
|
|
$
|
387,662
|
|
|
Fair Value
|
|
Gross Unrealized Loss
|
||||||||||||
|
June 30,
2014 |
|
December 31,
2013 |
|
June 30,
2014 |
|
December 31,
2013 |
||||||||
|
(In thousands)
|
||||||||||||||
Less than one year
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate notes, bonds and commercial paper
|
$
|
131,101
|
|
|
$
|
53,491
|
|
|
$
|
(68
|
)
|
|
$
|
(15
|
)
|
|
As of June 30, 2014
|
||||||||||||||
|
Total
|
|
Quoted
Market
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(In thousands)
|
||||||||||||||
Money market funds
|
$
|
79,522
|
|
|
$
|
79,522
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate notes, bonds and commercial paper
|
146,859
|
|
|
—
|
|
|
146,859
|
|
|
—
|
|
||||
Total available-for-sale securities
|
$
|
226,381
|
|
|
$
|
79,522
|
|
|
$
|
146,859
|
|
|
$
|
—
|
|
|
As of December 31, 2013
|
||||||||||||||
|
Total
|
|
Quoted
Market
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(In thousands)
|
||||||||||||||
Money market funds
|
$
|
300,605
|
|
|
$
|
300,605
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate notes, bonds and commercial paper
|
58,492
|
|
|
—
|
|
|
58,492
|
|
|
—
|
|
||||
Total available-for-sale securities
|
$
|
359,097
|
|
|
$
|
300,605
|
|
|
$
|
58,492
|
|
|
$
|
—
|
|
|
As of June 30, 2014
|
|
|
||||||||||||||||
(in thousands)
|
Carrying Value
|
|
Quoted market prices in active markets (Level 1)
|
|
Significant other observable inputs (Level 2)
|
|
Significant unobservable inputs (Level 3)
|
|
Impairment charges for the six months ended June 30, 2014
|
||||||||||
Investment in non-marketable security
|
$
|
600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
600
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2014
|
|
As of December 31, 2013
|
||||||||||||||||||||
(In thousands)
|
|
Face
Value
|
|
Carrying
Value
|
|
Fair Value
|
|
Face
Value
|
|
Carrying
Value
|
|
Fair Value
|
||||||||||||
5% Convertible Senior Notes due 2014 (the "2014 Notes")
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
172,500
|
|
|
$
|
164,047
|
|
|
$
|
175,821
|
|
1.125% Convertible Senior Notes due 2018 (the "2018 Notes")
|
|
$
|
138,000
|
|
|
$
|
112,316
|
|
|
$
|
185,189
|
|
|
$
|
138,000
|
|
|
$
|
109,629
|
|
|
$
|
142,427
|
|
(In thousands)
|
|
As of June 30, 2014
|
|
As of December 31, 2013
|
||||
1.125% Convertible Senior Notes due 2018
|
|
$
|
138,000
|
|
|
$
|
138,000
|
|
5% Convertible Senior Notes due 2014
|
|
—
|
|
|
172,500
|
|
||
Total principal amount of convertible notes
|
|
$
|
138,000
|
|
|
$
|
310,500
|
|
|
|
|
|
|
||||
Unamortized discount - 2018 Notes
|
|
$
|
(25,684
|
)
|
|
$
|
(28,371
|
)
|
Unamortized discount - 2014 Notes
|
|
—
|
|
|
(8,453
|
)
|
||
Total unamortized discount
|
|
$
|
(25,684
|
)
|
|
$
|
(36,824
|
)
|
|
|
|
|
|
||||
Total convertible notes
|
|
$
|
112,316
|
|
|
$
|
273,676
|
|
Less current portion
|
|
—
|
|
|
164,047
|
|
||
Total long-term convertible notes
|
|
$
|
112,316
|
|
|
$
|
109,629
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(In thousands)
|
||||||||||||||
2014 Notes coupon interest at a rate of 5%
|
$
|
1,773
|
|
|
$
|
2,156
|
|
|
$
|
3,929
|
|
|
$
|
4,313
|
|
2014 Notes amortization of discount and debt issuance costs at an additional effective interest rate of 11.7%
|
3,975
|
|
|
4,145
|
|
|
8,744
|
|
|
8,234
|
|
||||
2018 Notes coupon interest at a rate of 1.125%
|
388
|
|
|
—
|
|
|
776
|
|
|
—
|
|
||||
2018 Notes amortization of discount and debt issuance costs at an additional effective interest rate of 5.5%
|
1,494
|
|
|
—
|
|
|
2,967
|
|
|
—
|
|
||||
Total interest expense on convertible notes
|
$
|
7,630
|
|
|
$
|
6,301
|
|
|
$
|
16,416
|
|
|
$
|
12,547
|
|
|
Total
|
|
Remainder
of 2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
||||||||||||||
Contractual obligations (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Imputed financing obligation (2)
|
$
|
37,357
|
|
|
$
|
2,970
|
|
|
$
|
6,011
|
|
|
$
|
6,156
|
|
|
$
|
6,302
|
|
|
$
|
6,447
|
|
|
$
|
9,471
|
|
Leases and other contractual obligations
|
7,300
|
|
|
2,449
|
|
|
2,250
|
|
|
1,243
|
|
|
1,018
|
|
|
340
|
|
|
—
|
|
|||||||
Software licenses (3)
|
11,021
|
|
|
3,657
|
|
|
5,616
|
|
|
1,748
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Acquisition retention bonuses (4)
|
1,550
|
|
|
1,480
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Convertible notes
|
138,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138,000
|
|
|
—
|
|
|||||||
Interest payments related to convertible notes
|
6,987
|
|
|
776
|
|
|
1,553
|
|
|
1,553
|
|
|
1,553
|
|
|
1,552
|
|
|
—
|
|
|||||||
Total
|
$
|
202,215
|
|
|
$
|
11,332
|
|
|
$
|
15,500
|
|
|
$
|
10,700
|
|
|
$
|
8,873
|
|
|
$
|
146,339
|
|
|
$
|
9,471
|
|
(1)
|
The above table does not reflect possible payments in connection with uncertain tax benefits of approximately
$19.8 million
including
$17.9 million
recorded as a reduction of long-term deferred tax assets and
$1.9 million
in long-term income taxes payable as of
June 30, 2014
. As noted below in Note 13, “Income Taxes,” although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the outcome at this time.
|
(2)
|
With respect to the imputed financing obligation, the main components of the difference between the amount reflected in the contractual obligations table and the amount reflected on the condensed consolidated balance sheets are the interest on the imputed financing obligation and the estimated common area expenses over the future periods. The amount includes the amended Ohio lease and the amended Sunnyvale lease.
|
(3)
|
The Company has commitments with various software vendors for non-cancellable agreements generally having terms longer than
one
year.
|
(4)
|
In connection with acquisitions, the Company is obligated to pay retention bonuses to certain employees and contractors, subject to certain eligibility and acceleration provisions including the condition of employment. The last payment of CRI retention bonuses was paid in cash during the second quarter of 2014 except for
$1.5 million
payable to a designated charitable organization as a result of forfeitures by employees.
|
|
Shares Available
for Grant
|
|
Shares available as of December 31, 2013
|
2,527,428
|
|
Increase in shares approved for issuance
|
10,000,000
|
|
Stock options granted
|
(1,916,077
|
)
|
Stock options forfeited
|
863,102
|
|
Stock options expired under former plans
|
(142,400
|
)
|
Nonvested equity stock and stock units granted (1)
|
(343,014
|
)
|
Nonvested equity stock and stock units forfeited (1)
|
34,679
|
|
Total available for grant as of June 30, 2014
|
11,023,718
|
|
(1)
|
For purposes of determining the number of shares available for grant under the 2006 Plan against the maximum number of shares authorized, each share of restricted stock granted reduces the number of shares available for grant by
1.5
shares and each share of restricted stock forfeited increases shares available for grant by
1.5
shares.
|
|
Options Outstanding
|
|
|
|
|
|||||||
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
Per Share
|
|
Weighted
Average
Remaining
Contractual
Term (years)
|
|
Aggregate
Intrinsic
Value
|
|||||
|
(In thousands, except per share amounts)
|
|||||||||||
Outstanding as of December 31, 2013
|
11,377,146
|
|
|
$
|
11.32
|
|
|
|
|
|
|
|
Options granted
|
1,916,077
|
|
|
$
|
8.96
|
|
|
|
|
|
|
|
Options exercised
|
(464,254
|
)
|
|
$
|
6.73
|
|
|
|
|
|
|
|
Options forfeited
|
(863,102
|
)
|
|
$
|
16.99
|
|
|
|
|
|
|
|
Outstanding as of June 30, 2014
|
11,965,867
|
|
|
$
|
10.71
|
|
|
6.19
|
|
$
|
65,861
|
|
Vested or expected to vest at June 30, 2014
|
11,205,432
|
|
|
$
|
10.94
|
|
|
6.02
|
|
$
|
60,540
|
|
Options exercisable at June 30, 2014
|
5,904,488
|
|
|
$
|
14.41
|
|
|
3.97
|
|
$
|
21,658
|
|
|
Stock Option Plans
|
||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Stock Option Plans
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected stock price volatility
|
40
|
%
|
|
47
|
%
|
|
40-44%
|
|
|
47
|
%
|
||||
Risk free interest rate
|
2.2
|
%
|
|
0.8
|
%
|
|
2.1-2.2%
|
|
|
0.8-0.9%
|
|
||||
Expected term (in years)
|
6.0
|
|
|
5.4
|
|
|
6.0-6.1
|
|
|
5.4
|
|
||||
Weighted-average fair value of stock options granted to employees
|
$
|
4.95
|
|
|
$
|
2.61
|
|
|
$
|
3.98
|
|
|
$
|
2.35
|
|
|
|
Employee Stock Purchase Plan
|
||||||
|
|
Six Months Ended
|
||||||
|
|
June 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Employee Stock Purchase Plan
|
|
|
|
|
|
|
||
Expected stock price volatility
|
|
39-44%
|
|
|
48
|
%
|
||
Risk free interest rate
|
|
0.0-0.1%
|
|
|
0.1
|
%
|
||
Expected term (in years)
|
|
0.02-0.5
|
|
|
0.5
|
|
||
Weighted-average fair value of purchase rights granted under the purchase plan
|
|
$
|
3.91
|
|
|
$
|
1.94
|
|
Nonvested Equity Stock and Stock Units
|
|
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Nonvested at December 31, 2013
|
|
629,649
|
|
|
$
|
8.56
|
|
Granted
|
|
228,676
|
|
|
$
|
9.08
|
|
Vested
|
|
(128,220
|
)
|
|
$
|
9.26
|
|
Forfeited
|
|
(23,115
|
)
|
|
$
|
6.86
|
|
Nonvested at June 30, 2014
|
|
706,990
|
|
|
$
|
8.65
|
|
|
|
Employee
Severance
and Related Benefits
|
|
Facilities
|
|
Total
|
||||||
|
|
(In thousands)
|
||||||||||
Balance at December 31, 2013
|
|
$
|
1,732
|
|
|
$
|
133
|
|
|
$
|
1,865
|
|
Charges
|
|
39
|
|
|
—
|
|
|
39
|
|
|||
Payments
|
|
(1,771
|
)
|
|
(133
|
)
|
|
(1,904
|
)
|
|||
Balance at June 30, 2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cumulative Received
to-date as of June 30,
|
|
Estimated to Be Received in
|
|
Total Estimated
Cash Receipts
|
||||||||||||||||||||||
|
2014
|
|
Remainder
of 2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
|||||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Royalty revenue
|
$
|
47.3
|
|
|
$
|
23.6
|
|
|
$
|
47.3
|
|
|
$
|
47.9
|
|
|
$
|
48.0
|
|
|
$
|
24.0
|
|
|
$
|
238.1
|
|
Gain from settlement
|
0.7
|
|
|
0.4
|
|
|
0.7
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|||||||
Total
|
$
|
48.0
|
|
|
$
|
24.0
|
|
|
$
|
48.0
|
|
|
$
|
48.0
|
|
|
$
|
48.0
|
|
|
$
|
24.0
|
|
|
$
|
240.0
|
|
|
Cumulative Received
to-date as of June 30, |
|
Estimated to Be Received in
|
|
Total Estimated
Cash Receipts
|
||||||||||||||||||||||||||
|
2014
|
|
Remainder of 2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019 and thereafter
|
|
|||||||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Royalty revenue
|
$
|
24.7
|
|
|
$
|
19.3
|
|
|
$
|
38.7
|
|
|
$
|
39.5
|
|
|
$
|
40.0
|
|
|
$
|
40.0
|
|
|
$
|
74.5
|
|
|
$
|
276.7
|
|
Gain from settlement
|
0.8
|
|
|
0.7
|
|
|
1.3
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
||||||||
Total
|
$
|
25.5
|
|
|
$
|
20.0
|
|
|
$
|
40.0
|
|
|
$
|
40.0
|
|
|
$
|
40.0
|
|
|
$
|
40.0
|
|
|
$
|
74.5
|
|
|
$
|
280.0
|
|
Advanced Micro Devices Inc.
|
AMD
|
Broadcom Corporation
|
Broadcom
|
Cooper Lighting, LLC
|
Cooper Lighting
|
Cryptography Research, Inc.
|
CRI
|
Elpida Memory, Inc.
|
Elpida
|
Freescale Semiconductor Inc.
|
Freescale
|
Fujitsu Limited
|
Fujitsu
|
General Electric Company
|
GE
|
Intel Corporation
|
Intel
|
International Business Machines Corporation
|
IBM
|
Joint Electronic Device Engineering Councils
|
JEDEC
|
Lighting and Display Technology
|
LDT
|
LSI Corporation (now a division of Avago Technologies Limited)
|
LSI
|
Memory and Interfaces Division
|
MID
|
Micron Technologies, Inc.
|
Micron
|
Mobile Technology Division
|
MTD
|
Nanya Technology Corporation
|
Nanya
|
Qualcomm Incorporated
|
Qualcomm
|
Panasonic Corporation
|
Panasonic
|
Renesas Electronics
|
Renesas
|
Samsung Electronics Co., Ltd.
|
Samsung
|
SK hynix, Inc.
|
SK hynix
|
Sony Computer Electronics
|
Sony
|
ST Microelectronics N.V.
|
STMicroelectronics
|
Toshiba Corporation
|
Toshiba
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Royalties
|
91.1
|
%
|
|
98.4
|
%
|
|
92.6
|
%
|
|
98.8
|
%
|
Contract and other revenue
|
8.9
|
%
|
|
1.6
|
%
|
|
7.4
|
%
|
|
1.2
|
%
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue*
|
13.9
|
%
|
|
12.7
|
%
|
|
13.4
|
%
|
|
11.1
|
%
|
Research and development*
|
36.2
|
%
|
|
53.1
|
%
|
|
35.2
|
%
|
|
51.0
|
%
|
Marketing, general and administrative*
|
24.3
|
%
|
|
24.4
|
%
|
|
24.2
|
%
|
|
31.4
|
%
|
Gain from sale of intellectual property
|
—
|
%
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
|
(1.1
|
)%
|
Restructuring charges
|
—
|
%
|
|
—
|
%
|
|
0.0
|
%
|
|
1.8
|
%
|
Gain from settlement
|
(0.7
|
)%
|
|
—
|
%
|
|
(0.7
|
)%
|
|
—
|
%
|
Total operating costs and expenses
|
73.7
|
%
|
|
90.1
|
%
|
|
72.0
|
%
|
|
94.2
|
%
|
Operating income (loss)
|
26.3
|
%
|
|
9.9
|
%
|
|
28.0
|
%
|
|
5.8
|
%
|
Interest income and other income (expense), net
|
0.1
|
%
|
|
(2.4
|
)%
|
|
0.1
|
%
|
|
(1.2
|
)%
|
Interest expense
|
(11.4
|
)%
|
|
(12.8
|
)%
|
|
(12.1
|
)%
|
|
(11.8
|
)%
|
Interest and other income (expense), net
|
(11.3
|
)%
|
|
(15.2
|
)%
|
|
(12.0
|
)%
|
|
(13.0
|
)%
|
Income (loss) before income taxes
|
15.0
|
%
|
|
(5.3
|
)%
|
|
16.0
|
%
|
|
(7.2
|
)%
|
Provision for income taxes
|
8.4
|
%
|
|
8.2
|
%
|
|
7.7
|
%
|
|
7.4
|
%
|
Net income (loss)
|
6.6
|
%
|
|
(13.5
|
)%
|
|
8.3
|
%
|
|
(14.6
|
)%
|
Cost of revenue
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
Research and development
|
3.4
|
%
|
|
2.9
|
%
|
|
2.5
|
%
|
|
2.8
|
%
|
Marketing, general and administrative
|
2.9
|
%
|
|
3.3
|
%
|
|
2.5
|
%
|
|
4.0
|
%
|
|
|
Three Months
|
|
|
|
Six Months
|
|
|
||||||||||||||
|
|
Ended June 30,
|
|
Change in
|
|
Ended June 30,
|
|
Change in
|
||||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
Percentage
|
|
2014
|
|
2013
|
|
Percentage
|
||||||||||
Total Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Royalties
|
|
$
|
69.7
|
|
|
$
|
57.0
|
|
|
22.3
|
%
|
|
$
|
143.4
|
|
|
$
|
123.2
|
|
|
16.3
|
%
|
Contract and other revenue
|
|
6.8
|
|
|
0.9
|
|
|
NM*
|
|
|
11.4
|
|
|
1.6
|
|
|
NM*
|
|
||||
Total revenue
|
|
$
|
76.5
|
|
|
$
|
57.9
|
|
|
32.1
|
%
|
|
$
|
154.8
|
|
|
$
|
124.8
|
|
|
24.1
|
%
|
*
|
NM — percentage is not meaningful
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
|
June 30,
|
|
Change in
|
|
June 30,
|
|
Change in
|
||||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
Percentage
|
|
2014
|
|
2013
|
|
Percentage
|
||||||||||
Engineering costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue
|
|
$
|
4.9
|
|
|
$
|
1.0
|
|
|
NM*
|
|
|
$
|
9.2
|
|
|
$
|
1.1
|
|
|
NM*
|
|
Amortization of intangible assets
|
|
5.7
|
|
|
6.4
|
|
|
(10.2
|
)%
|
|
11.4
|
|
|
12.8
|
|
|
(10.3
|
)%
|
||||
Stock-based compensation
|
|
0.0
|
|
|
0.0
|
|
|
—
|
%
|
|
0.0
|
|
|
0.0
|
|
|
—
|
%
|
||||
Total cost of revenue
|
|
10.6
|
|
|
7.4
|
|
|
44.4
|
%
|
|
20.6
|
|
|
13.9
|
|
|
48.6
|
%
|
||||
Research and development
|
|
25.1
|
|
|
29.1
|
|
|
(14.0
|
)%
|
|
50.7
|
|
|
60.1
|
|
|
(15.7
|
)%
|
||||
Stock-based compensation
|
|
2.6
|
|
|
1.7
|
|
|
57.5
|
%
|
|
3.9
|
|
|
3.5
|
|
|
11.0
|
%
|
||||
Total research and development
|
|
27.7
|
|
|
30.8
|
|
|
(10.1
|
)%
|
|
54.6
|
|
|
63.6
|
|
|
(14.2
|
)%
|
||||
Total engineering costs
|
|
$
|
38.3
|
|
|
$
|
38.2
|
|
|
0.4
|
%
|
|
$
|
75.2
|
|
|
$
|
77.5
|
|
|
(3.0
|
)%
|
*
|
NM — percentage is not meaningful
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
|
June 30,
|
|
Change in
|
|
June 30,
|
|
Change in
|
||||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
Percentage
|
|
2014
|
|
2013
|
|
Percentage
|
||||||||||
Marketing, general and administrative costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketing, general and administrative costs
|
|
$
|
16.4
|
|
|
$
|
12.2
|
|
|
34.1
|
%
|
|
$
|
33.6
|
|
|
$
|
34.2
|
|
|
(1.8
|
)%
|
Stock-based compensation
|
|
2.2
|
|
|
1.9
|
|
|
16.6
|
%
|
|
3.8
|
|
|
5.0
|
|
|
(23.6
|
)%
|
||||
Total marketing, general and administrative costs
|
|
$
|
18.6
|
|
|
$
|
14.1
|
|
|
31.7
|
%
|
|
$
|
37.4
|
|
|
$
|
39.2
|
|
|
(4.6
|
)%
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|||||||||||||
|
|
June 30,
|
|
Change in
|
|
June 30,
|
|
Change in
|
|||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
Percentage
|
|
2014
|
|
2013
|
|
Percentage
|
|||||||||
Gain from sale of intellectual property
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
N/A*
|
|
$
|
0.2
|
|
|
$
|
1.4
|
|
|
(87.8
|
)%
|
*
|
N/A — not applicable
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||
|
|
June 30,
|
|
Change in
|
|
June 30,
|
|
Change in
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
Percentage
|
|
2014
|
|
2013
|
|
Percentage
|
||||||||
Gain from settlement
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
N/A*
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
N/A*
|
*
|
N/A — not applicable
|
*
|
N/A — not applicable
|
|
|
Three Months
|
|
|
|
Six Months
|
|
|
||||||||||||||
|
|
Ended June 30,
|
|
Change in
|
|
Ended June 30,
|
|
Change in
|
||||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
Percentage
|
|
2014
|
|
2013
|
|
Percentage
|
||||||||||
Interest income and other income (expense), net
|
|
$
|
0.1
|
|
|
$
|
(1.4
|
)
|
|
NM*
|
|
|
$
|
0.1
|
|
|
$
|
(1.4
|
)
|
|
NM*
|
|
Interest expense
|
|
(8.8
|
)
|
|
(7.4
|
)
|
|
18.1
|
%
|
|
(18.7
|
)
|
|
(14.7
|
)
|
|
26.9
|
%
|
||||
Interest and other income (expense), net
|
|
$
|
(8.7
|
)
|
|
$
|
(8.8
|
)
|
|
(2.0
|
)%
|
|
$
|
(18.6
|
)
|
|
$
|
(16.1
|
)
|
|
14.9
|
%
|
*
|
NM — percentage is not meaningful
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
|
June 30,
|
|
Change in
|
|
June 30,
|
|
Change in
|
||||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
Percentage
|
|
2014
|
|
2013
|
|
Percentage
|
||||||||||
Provision for income taxes
|
|
$
|
6.4
|
|
|
$
|
4.7
|
|
|
34.8
|
%
|
|
$
|
11.9
|
|
|
$
|
9.3
|
|
|
28.2
|
%
|
Effective tax rate
|
|
55.9
|
%
|
|
(153.0
|
)%
|
|
|
|
|
48.0
|
%
|
|
(102.9
|
)%
|
|
|
|
|
As of
|
||||||
|
June 30,
2014 |
|
December 31,
2013 |
||||
|
(In millions)
|
||||||
Cash and cash equivalents
|
$
|
99.6
|
|
|
$
|
338.7
|
|
Marketable securities
|
146.8
|
|
|
49.0
|
|
||
Total cash, cash equivalents, and marketable securities
|
$
|
246.4
|
|
|
$
|
387.7
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Net cash provided by operating activities
|
$
|
26.5
|
|
|
$
|
5.2
|
|
Net cash used in investing activities
|
$
|
(98.7
|
)
|
|
$
|
(1.8
|
)
|
Net cash provided by (used in) financing activities
|
$
|
(166.8
|
)
|
|
$
|
2.9
|
|
|
Total
|
|
Remainder
of 2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
||||||||||||||
Contractual obligations (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Imputed financing obligation (2)
|
$
|
37,357
|
|
|
$
|
2,970
|
|
|
$
|
6,011
|
|
|
$
|
6,156
|
|
|
$
|
6,302
|
|
|
$
|
6,447
|
|
|
$
|
9,471
|
|
Leases and other contractual obligations
|
7,300
|
|
|
2,449
|
|
|
2,250
|
|
|
1,243
|
|
|
1,018
|
|
|
340
|
|
|
—
|
|
|||||||
Software licenses (3)
|
11,021
|
|
|
3,657
|
|
|
5,616
|
|
|
1,748
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Acquisition retention bonuses (4)
|
1,550
|
|
|
1,480
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Convertible notes
|
138,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138,000
|
|
|
—
|
|
|||||||
Interest payments related to convertible notes
|
6,987
|
|
|
776
|
|
|
1,553
|
|
|
1,553
|
|
|
1,553
|
|
|
1,552
|
|
|
—
|
|
|||||||
Total
|
$
|
202,215
|
|
|
$
|
11,332
|
|
|
$
|
15,500
|
|
|
$
|
10,700
|
|
|
$
|
8,873
|
|
|
$
|
146,339
|
|
|
$
|
9,471
|
|
(1)
|
The above table does not reflect possible payments in connection with uncertain tax benefits of approximately
$19.8 million
including
$17.9 million
recorded as a reduction of long-term deferred tax assets and
$1.9 million
in long-term income taxes payable as of
June 30, 2014
. As noted in Note 13, “Income Taxes,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q, although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, we cannot reasonably estimate the outcome at this time.
|
(2)
|
With respect to the imputed financing obligation, the main components of the difference between the amount reflected in the contractual obligations table and the amount reflected on the condensed consolidated balance sheets are the interest on the imputed financing obligation and the estimated common area expenses over the future periods. The amount includes the amended Ohio lease and the amended Sunnyvale lease.
|
(3)
|
We have commitments with various software vendors for non-cancellable agreements generally having terms longer than
one
year.
|
(4)
|
In connection with acquisitions, we are obligated to pay retention bonuses to certain employees and contractors, subject to certain eligibility and acceleration provisions including the condition of employment. The last payment of CRI retention bonuses was paid in cash during the second quarter of 2014 except for
$1.5 million
payable to a designated charitable organization as a result of forfeitures by employees.
|
•
|
expenditure of significant financial and research and development resources in efforts to analyze, correct, eliminate or work-around breaches, errors or defects or to address and eliminate vulnerabilities;
|
•
|
financial liability to customers for breach of certain contract provisions;
|
•
|
loss of existing or potential customers;
|
•
|
delayed or lost revenue;
|
•
|
delay or failure to attain market acceptance;
|
•
|
negative publicity, which would harm our reputation; and
|
•
|
litigation, regulatory inquiries or investigations that would be costly and harm our reputation.
|
•
|
hiring, maintaining and managing a workforce and facilities remotely and under various legal systems;
|
•
|
natural disasters, acts of war, terrorism, widespread illness or security breaches;
|
•
|
export controls, tariffs, import and licensing restrictions and other trade barriers;
|
•
|
profits, if any, earned abroad being subject to local tax laws and not being repatriated to the United States or, if repatriation is possible, limited in amount;
|
•
|
adverse tax treatment of revenue from international sources and changes to tax codes, including being subject to foreign tax laws and being liable for paying withholding, income or other taxes in foreign jurisdictions;
|
•
|
unanticipated changes in foreign government laws and regulations;
|
•
|
lack of protection of our intellectual property and other contract rights by jurisdictions in which we may do business to the same extent as the laws of the United States;
|
•
|
social, political and economic instability;
|
•
|
geopolitical issues, including changes in diplomatic and trade relationships; and
|
•
|
cultural differences in the conduct of business both with customers and in conducting business in our international facilities and international sales offices.
|
•
|
any progress, or lack of progress, real or perceived, in the development of products that incorporate our innovations and technology companies' acceptance of our products, including the results of our efforts to expand into new target markets;
|
•
|
our signing or not signing new licenses and the loss of strategic relationships with any customer;
|
•
|
announcements of technological innovations or new products by us, our customers or our competitors;
|
•
|
changes in our strategies, including changes in our licensing focus and/or acquisitions of companies with business models or target markets different from our own;
|
•
|
positive or negative reports by securities analysts as to our expected financial results and business developments;
|
•
|
developments with respect to patents or proprietary rights and other events or factors;
|
•
|
new litigation and the unpredictability of litigation results or settlements; and
|
•
|
issuance of additional securities by us, including in acquisitions.
|
•
|
we may be more vulnerable to economic downturns, less able to withstand competitive pressures and less flexible in responding to changing business and economic conditions;
|
•
|
our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, litigation, general corporate or other purposes may be limited;
|
•
|
a substantial portion of our cash flows from operations in the future may be required for the payment of the principal amount of our existing indebtedness when it becomes due at maturity in August 2018; and
|
•
|
we may be required to make cash payments upon any conversion of the 2018 Notes, which would reduce our cash on hand.
|
•
|
our board of directors is authorized, without prior stockholder approval, to create and issue preferred stock, commonly referred to as “blank check” preferred stock, with rights senior to those of common stock, which means that a stockholder rights plan could be implemented by our board;
|
•
|
our board of directors is staggered into two classes, only one of which is elected at each annual meeting;
|
•
|
stockholder action by written consent is prohibited;
|
•
|
nominations for election to our board of directors and the submission of matters to be acted upon by stockholders at a meeting are subject to advance notice requirements;
|
•
|
certain provisions in our bylaws and certificate of incorporation such as notice to stockholders, the ability to call a stockholder meeting, advance notice requirements and action of stockholders by written consent may only be amended with the approval of stockholders holding 66 2/3% of our outstanding voting stock;
|
•
|
our stockholders have no authority to call special meetings of stockholders; and
|
•
|
our board of directors is expressly authorized to make, alter or repeal our bylaws.
|
•
|
any current or future U.S. or foreign patent applications will be approved and not be challenged by third parties;
|
•
|
our issued patents will protect our intellectual property and not be challenged by third parties;
|
•
|
the validity of our patents will be upheld;
|
•
|
our patents will not be declared unenforceable;
|
•
|
the patents of others will not have an adverse effect on our ability to do business;
|
•
|
Congress or the U.S. courts or foreign countries will not change the nature or scope of rights afforded patents or patent owners or alter in an adverse way the process for seeking or enforcing patents;
|
•
|
changes in law will not be implemented, or changes in interpretation of such laws will occur, that will affect our ability to protect and enforce our patents and other intellectual property, including as a result of the passage of the America Invents Act of 2011 (which codifies several significant changes to the U.S. patent laws, including changing from a “first to invent” to a “first inventor to file” system, limiting where a patentee may file a patent suit, requiring the apportionment of patent damages, replacing interference proceedings with derivation actions, and creating a post-grant opposition process to challenge patents after they have issued);
|
•
|
new legal theories and strategies utilized by our competitors will not be successful;
|
•
|
others will not independently develop similar or competing chip interfaces or design around any patents that may be issued to us; or
|
•
|
factors such as difficulty in obtaining cooperation from inventors, pre-existing challenges or litigation, or license or other contract issues will not present additional challenges in securing protection with respect to patents and other intellectual property that we acquire.
|
|
RAMBUS INC.
|
|
|
|
|
Date: July 25, 2014
|
By:
|
/s/ Satish Rishi
|
|
|
Satish Rishi
|
|
|
Senior Vice President, Finance and
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer and
|
|
|
Duly Authorized Officer)
|
Exhibit
Number
|
|
Description of Document
|
|
|
|
10.1*
|
|
2006 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 30, 2014).
|
|
|
|
10.2*
|
|
Form of agreements under the 2006 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed April 30, 2014).
|
|
|
|
10.3*
|
|
2006 Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed April 30, 2014).
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1**
|
|
Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2**
|
|
Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
*
|
Management contract or compensatory plan, contract or arrangement.
|
**
|
The certifications furnished in Exhibit 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
|
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