UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 September 30, 1996
[ ] 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 0-17739
RAMTRON INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 84-0962308
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1850 Ramtron Drive, Colorado Springs, CO 80921
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (719) 481-7000
Indicate by check mark whether 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 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.01 Par Value - 36,538,653 shares as of October 31, 1996
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
RAMTRON INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except par value amounts)
<CAPTION>
Sep. 30, Dec. 31,
1996 1995
-------- --------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 2,971 $ 6,283
Accounts receivable, less allowances
of $459 and $284, respectively 4,700 2,599
Inventories 9,120 5,552
Deposits 1,500 5,445
Prepaid expenses 500 839
Other current assets 148 118
-------- --------
Total current assets $18,939 $20,836
Property, plant and equipment, net 9,198 10,169
Intangible assets, net 5,241 5,532
Other assets 21 21
-------- --------
$33,399 $36,558
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,749 $ 3,347
Accrued compensation 2,997 150
Other accrued liabilities 1,893 1,595
License rights 550 550
Deferred revenue 925 2,499
-------- --------
Total current liabilities 11,114 8,141
Long-term promissory note and
accrued interest, related party 3,092 2,854
Long-term license rights 1,100 1,100
-------- --------
Total liabilities 15,306 12,095
-------- --------
Stockholders' Equity:
Preferred stock, $0.01 par value,
10,000 shares authorized - no shares issued -- --
Common stock, $0.01 par value, 50,000 shares
authorized - 36,498 and 36,387 shares issued
and outstanding, respectively 365 364
Additional paid-in capital 148,514 148,290
Accumulated deficit (130,786) (124,191)
-------- --------
Total stockholders' equity 18,093 24,463
-------- --------
$33,399 $36,558
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
RAMTRON INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
(Amounts in thousands, except per share amounts)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Product sales $ 3,458 $ 2,401 $ 14,306 $ 7,980
Royalties -- -- -- 6,500
License fees 2,750 5,000 7,750 6,000
Customer-sponsored research
and development 61 116 155 252
-------- -------- -------- --------
6,269 7,517 22,211 20,732
-------- -------- -------- --------
Costs and expenses:
Cost of product sales 2,869 2,022 10,976 7,389
Research and development 3,867 2,239 10,268 8,816
Customer-sponsored research
and development 55 102 140 218
Sales, general and administrative 2,447 1,966 7,360 5,954
Sales, general and
administrative, related parties -- -- -- 148
-------- -------- -------- --------
9,238 6,329 28,744 22,525
-------- -------- -------- --------
Operating income (loss) (2,969) 1,188 (6,533) (1,793)
Interest expense, related parties (80) (387) (237) (1,945)
Gain on disposition of equity investment -- -- -- 788
Other income 50 177 176 247
-------- -------- -------- --------
Net income (loss) ($ 2,999) $ 978 $ (6,594) $ (2,703)
======== ======== ======== ========
Net income (loss) per share ($0.08) $0.04 $(0.18) $(0.14)
======== ======== ======== ========
Weighted average shares 36,484 27,432 36,448 19,594
======== ======== ======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
RAMTRON INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
(Amounts in thousands)
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(6,594) $(2,703)
Adjustments used to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,149 2,209
Accrued compensation 2,847 --
Gain on sale of equity investment -- (788)
Other -- 23
Changes in assets and liabilities:
Accounts receivable (2,010) (1,248)
Inventories (3,569) 4,528
Deposits 4,164 (4,000)
Accounts payable and accrued liabilities 1,700 (2,406)
Long-term accrued interest, related parties 237 1,945
Deferred revenue (1,574) 1,734
Other (265) (1,595)
-------- --------
Net cash used in operating activities (2,915) (2,301)
-------- --------
Cash flows from investing activities:
Purchase of property, plant and equipment (628) (273)
Proceeds from sale of equity investment -- 1,500
Proceeds from sale of assets 7 375
-------- --------
Net cash provided by (used in) investing activities (621) 1,602
-------- --------
Cash flows from financing activities:
Proceeds from notes payable, related parties -- 3,579
Payments on note payable, related party -- (810)
Payments on capital lease obligations -- (22)
Issuance of common stock, net of expenses 224 1,282
-------- --------
Net cash provided by financing activities 224 4,029
-------- --------
Net increase (decrease) in cash and cash equivalents (3,312) 3,330
Cash and cash equivalents, beginning of period 6,283 181
-------- --------
Cash and cash equivalents, end of period $ 2,971 $ 3,511
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
RAMTRON INTERNATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
___________________________________________________________________________
Note 1. Basis of Presentation and Management Opinion
The accompanying consolidated financial statements at September 30, 1996 and
for the periods then ended have been prepared from the books and records of
the Company without audit. The statements reflect all normal recurring
adjustments which, in the opinion of management, are necessary for the fair
presentation of financial position, results of operations and cash flows for
the periods presented.
Certain information and disclosures normally included in financial statements
have been omitted under Securities and Exchange Commission regulations. It is
suggested that the accompanying financial statements be read in conjunction
with the annual report on Form 10-K for the year ended December 31, 1995. The
results of operations for the period ended September 30, 1996, are not
necessarily indicative of the operating results for the full year.
Note 2. Inventories
Inventories consist of:
Sep. 30, Dec. 31,
1996 1995
-------- --------
(in thousands)
(Unaudited)
Finished goods $5,147 $3,149
Work in process 3,851 2,115
Raw material 122 288
-------- --------
Total $9,120 $5,552
======== ========
Note 3. Promissory Note, Related Party
In September 1995, the Company and the National Electrical Benefit Fund (the
"Fund") entered into a Loan Agreement (the "Fund Credit Facility") pursuant
to which the Fund agreed to lend to the Company up to $12,000,000 bearing
interest at 12% and maturing in June 1998. The outstanding principal balance
and accrued interest as of September 30, 1996 under the Fund Credit Facility
were $2,600,000 and $492,000, respectively. The Fund Credit Facility is
secured by a first priority security lien on the Company's assets. The Fund
has the right to convert all or any portion of the amounts outstanding under
the Fund Credit Facility into common stock at any time or times before
maturity of the loan in June 1998 at a conversion price equal to $10.5125 for
each share of common stock.
Note 4. Income Taxes
The Company provides for income taxes pursuant to Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" ("SFAS 109"). The
Company has determined that under SFAS 109, any previously unrecognized tax
benefits did not satisfy the realization criteria set forth therein. A
valuation allowance has therefore been recorded against the entire net
deferred tax asset.
<PAGE>
Note 5. Earnings Per Share
Net income or loss per share is computed by dividing the net income or loss
by the weighted average number of shares of common stock outstanding during
each period presented. Certain warrants, employee stock options and in 1995
convertible preferred stock are common stock equivalents; however, such
warrants, certain employee stock options and convertible preferred stock have
not been included in net loss per share calculations for the three month
period ended September 30, 1996 and the nine month periods ended September 30,
1996 and 1995 due to their antidilutive affect. Warrants, certain employee
stock options and in 1995 convertible preferred stock are included in weighted
average shares for the three month period ended September 30, 1995, as they
are common stock equivalents and their effects are dilutive.
Note 6. Commitments
EMPLOYMENT SECURITY PROGRAM. In May 1995, the Board of Directors of the
Company adopted and in December 1995, the Company's stockholders approved,
an Employment Security Program (the "Severance Plan") pursuant to which
substantially all full-time employees of the Company on May 18, 1995 are
entitled to receive severance pay and accrued vacation pay following
involuntary termination of employment initiated after May 18, 1995 and on
or before October 25, 1996. The Severance Plan requires that the Company set
aside funds in a separate bank account to provide for the payment, if
necessary, of severance pay as outlined in the Severance Plan as well as an
amount equal to accrued employee vacation pay to eligible employees upon
termination of their employment with the Company, if necessary, during the
Severance Plan period. To date, no amounts have been paid or accrued relating
to the Severance Plan.
INCENTIVE PROGRAM. In May 1995, the Board of Directors of the Company
adopted and in December 1995, the Company's stockholders approved, an
Incentive Program pursuant to which the Company will, in December 1996, award
bonuses payable in cash or the Company's common stock to eligible employees of
the Company. The purpose of the Incentive Program is to retain and motivate
employees of the Company in order to ensure the growth and success of the
Company. Under the Incentive Program, on October 25, 1996, the Company
will establish an employee bonus pool in the amount equal to the principal
amount of the funds (i.e., $1,502,769) initially set aside by the Company for
the Company's Severance Plan less the amount of any severance payments made by
the Company to its employees under the Severance Plan above. As of
September 30, 1996, the maximum amount of the bonus pool was $1,502,769.
On December 2, 1996, the Company will distribute to eligible employees of the
Company all of the funds in the bonus pool. Employees eligible to receive a
distribution on December 2, 1996 may elect to receive their distribution
either in cash or in common stock of the Company. If an employee elects to
receive their distribution in common stock, the number of shares distributed
to the employee will be equal to the total cash value of the employee's
distribution divided by $3.50, which amount approximates the last reported
sale price for the Company's common stock as reported on The Nasdaq Stock
Market on April 26, 1995. The incentive program will terminate on December 2,
1996 after the distribution thereunder has been made.
The Company accounts for the Incentive Program by amortizing the total
estimated expense of the Incentive Program evenly over the period of time
between the date of shareholder approval of the plan, December 15, 1995, and
the bonus pool distribution date of December 2, 1996. The total expense of
the Incentive Program is estimated on a quarterly basis and is determined
based upon either the minimum cash payout or the market price of the Company's
common stock if such market price is in excess of $3.50 per share. Pursuant
to the terms of the Incentive Program, the Company expensed approximately
<PAGE>
$1,218,000 and $2,847,000 in the three and nine month periods, respectively,
ended September 30, 1996 and the total accrued liability as of September 30,
1996 for such program was approximately $2,997,000.
Note 7. Contingencies
Interference proceedings are continuing, challenging one of the Company's
issued patents which pertains to an invention that the Company believes is of
fundamental importance to its business. In 1992, a three-way "interference"
contest was declared in the United States Patent and Trademark Office (the
"Patent Office") concerning US Patent 4,873,664, which is owned by the
Company. US Patent 4,873,664 covers a basic ferroelectric memory cell design
that is of fundamental importance to the Company's business interests in the
United States. An interference is declared in the Patent Office when two or
more parties each claim to have made the same invention. The interference
proceedings are therefore conducted to determine which party is entitled to
the patent rights corresponding to the invention. In the present interference
contest, the Company is the "senior" party and is in possession of the issued
US patent. The other two parties involved in the interference are "junior"
parties, and each has the burden of proof of convincing the Patent Office by a
preponderance of the evidence that it was the first to invent the subject
matter of the invention and thus is entitled to the corresponding patent
rights. The Company and only one of the two claimant parties in the
interference proceedings filed briefs in this matter. Oral arguments were
presented before the Patent Office on March 1, 1996. A decision by the Patent
Office was originally expected within six (6) months after the oral hearing,
but due to the complexity of the case, a decision is now expected within
eighteen (18) months after the oral hearing. Such decision would complete the
administrative process. The non-prevailing party would then have the right,
upon the filing of appropriate petitions, to pursue its case in Federal Court.
The Company, if the non-prevailing party, would remain in possession of the
issued US Patent while it pursues its case in Federal Court. The Company has
vigorously defended its patent rights in this interference contest and will
continue such efforts. The Company is uncertain as to the ultimate outcome of
the above matter, as well as the associated effect upon the Company's
financial position and results of operations.
ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Revenues for the third quarter and nine months ended September 30, 1996 were
$6.3 million and $22.2 million, respectively, representing a decrease of 16%
for the quarter and an increase of 7% for the nine month period over the
respective periods in 1995. The revenue decrease for the quarter ended
September 30, 1996 as compared with the respective period in 1995 was
primarily a result of decreased license fee revenue, although an increase in
product revenue partially offset such license fee revenue decrease. For the
nine months ended September 30, 1996 as compared with the respective period in
1995, the increase in total revenues was primarily the result of an increase
in both product revenue and license fee revenue, but was partially offset by a
100% decrease in royalty revenue.
Product sales revenue for the third quarter and nine months ended
September 30, 1996 increased to $3.5 million and $14.3 million, respectively,
representing increases of 44% and 79% for the three and nine month periods
over the respective periods in 1995. The Company's product revenue mix
continues to be dominated by EDRAM product sales with EDRAM product revenue
totaling 86% and 90% of total product revenue for the third quarter and nine
months ended September 30, 1996, respectively.
<PAGE>
FRAM product revenues for the third quarter and nine months ended
September 30, 1996 increased to $.5 million and $1.5 million, respectively,
representing increases of 160% for the quarter and 91% for the nine month
period over the respective periods in 1995. Increases in FRAM product
revenues for the nine months in 1996 as compared to the same period in 1995
resulted primarily from increased product availability and sales volume of the
Company's 16 kilobit serial FRAM products and from RFID FRAM products.
EDRAM product revenues for the third quarter and nine months ended
September 30, 1996 increased to $3 million and $12.8 million, respectively,
representing increases of 34% for the quarter and 78% for the nine month
period over the respective periods in 1995. The Company experienced a 50%
decrease in EDRAM product sales on a sequential basis in the third quarter of
1996, resulting primarily from competitive pricing and supply pressures in the
worldwide DRAM market. Such pressures had only a minimal effect on the
average selling prices for the Company's EDRAM products during the third
quarter with average selling prices decreasing by approximately 4%. Certain
existing and new customers responded to these pressures by subsequently
canceling or postponing orders and consuming existing inventories in
anticipation of future reduced prices, which in turn lead to reduced sales
volume of EDRAM products during the third quarter. EDRAM product revenues were
also greater in the first two quarters of the year partially resulting from
the fulfillment of a substantial EDRAM product backlog which existed at the
end of 1995. Such backlog existed due to a limited supply of EDRAM product in
late 1995.
No royalty revenue was recorded in the third quarter or the nine months ended
September 30, 1996 as the contract that produced such royalty revenue of $6.5
million during 1995 terminated during the second quarter of 1995.
License fee revenue during the third quarter and for the nine months ended
September 30, 1996 resulted from the expansion of an existing license
agreement and the achievement of milestones pursuant to existing license
agreements. License fee revenue for the nine month period ending
September 30, 1996 resulted from license agreements with Racom Systems, Inc.,
Intag International Ltd. and Toshiba Corporation.
Cost of product sales as a percentage of product revenues during the third
quarter and for the nine months ended September 30, 1996 were 83% and 77%,
respectively, compared with 84% and 93% for the same periods in 1995. The
improvement in cost of sales as a percentage of product revenues is related
directly to the Company's EDRAM products. Increased sales volumes, favorable
average selling prices and lower supply costs for the Company's EDRAM products
were the primary reasons leading to the improved cost of product sales
percentages during 1996. Cost of product sales as a percentage of product
revenues increased 9% on a sequential basis in the third quarter of 1996.
Such increase resulted from both lower average selling prices and from the
sales mix of the Company's EDRAM products sold during the third quarter. Cost
of product sales percentages for FRAM products remains high due primarily to
the introduction of new designs, low volume of manufacturing and continued
development of manufacturing processes. FRAM product cost of sales
percentages are expected to remain high until certain economies relating to
volume manufacturing and more efficient designs can be realized internally and
through the Company's alliance foundry relationships.
<PAGE>
Research and development expenses for the third quarter and nine months ended
September 30, 1996 increased by 73% and 16%, respectively, over the same
periods in 1995. Such expense increases resulted primarily from the Company's
employee incentive program. Research and development expenses relating to the
Company's employee incentive program for the third quarter and nine months
ended September 30, 1996 totaled $.7 million and $1.8 million, respectively,
with no such expenses being recorded for the same period in 1995 (see Note 6
to Notes to Consolidated Financial Statements). Additionally, increases in
manufacturing expenses to support alliance development programs resulted in an
increase in research and development expenses during the third quarter.
Sales, general and administrative expenses for the third quarter and nine
months ended September 30, 1996 increased 24% in both periods over the
respective periods in 1995 due primarily to commissions on increased product
sales and expenses associated with the Company's employee incentive program.
Sales, general and administrative expenses for the third quarter and nine
months ended September 30, 1996 included incentive expenses of $.5 million and
$1.1 million, respectively, with no such expense being recorded for the same
period in 1995 (see Note 6 to Notes to Consolidated Financial Statements).
Sales, general and administrative expenses, related parties, for the nine
months ended September 30, 1996 decreased by $148,000 as compared to the same
period in 1995. Such decreases resulted from the discontinuation of services
from companies owned by Oren L. Benton.
Interest expense, related parties for the third quarter and nine months ended
September 30, 1996 decreased by $.3 million (79%) and $1.7 million (88%),
respectively, as compared with the same periods in 1995 resulting from the
conversion of approximately $27 million of debt to equity during the last six
months of 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash balance as of September 30, 1996 was $3 million,
representing a $3.3 million decrease from December 31, 1995. The Company's
primary uses of cash during the first nine months of 1996 were to fund
operations and for property and equipment expenditures in the amounts of
$2.9 million and $.6 million, respectively. Working capital as of
September 30, 1996 was $7.8 million, a decrease of approximately $4.9 million
from December 31, 1995. Approximately $3 million of such decrease in working
capital relates to the accrual of the Company's employee incentive plan, a
non-cash expenditure that will be distributed during the fourth quarter of the
current year (see Note 6 to Notes to Consolidated Financial Statements).
The Company intends to finance its operations and working capital requirements
during the remainder of 1996 by relying on its existing cash resources as of
September 30, 1996, which consists of $3 million in cash and $1.5 million of
deposits for future EDRAM inventory purchases. In addition, the Company
intends to rely on payments from existing and future license and development
agreements and from the sale of the Company's products. The Company's
accounts receivable balance of $4.7 million as of September 30, 1996 includes
a $2 million license fee from an existing licensee with payment to be received
during the fourth quarter of the current year. If required, the Company also
has amounts available to it under a credit facility of $9.4 million as of
September 30, 1996. Such credit facility agreement does not contain any
requirements for the Company to satisfy any performance criteria or specific
financial covenants other than those typically found in standard commercial
credit agreements in order for the Company to borrow amounts pursuant to the
credit facility.
<PAGE>
The Company's future capital requirements include financing the growth of
working capital items such as accounts receivable and inventory, the purchase
of manufacturing equipment and the funding of research and development
efforts. The Company is continuing to pursue additional license and
development arrangements with third parties as a source of such capital. The
Company will also continue to seek reasonable sources of financing to satisfy
its future operating and working capital requirements, but has not yet
identified any specific new sources of such financing. There can be no
assurance, however, that such financing, if required, will be available or, if
available, will be on satisfactory terms to the Company.
OUTLOOK
The Company expects revenues will continue to be sporadic in the foreseeable
future until the Company's products gain wider market acceptance and can be
manufactured in increased volumes and in a cost effective manner. The Company
has historically depended and continues to depend on revenues from new license
arrangements and upon the achievement of milestones under the Company's
existing and new license agreements as the major contributor of positive
quarterly operating results. Such license revenue does not typically occur on
a consistent basis and is therefore expected to create substantial
fluctuations in the Company's future quarterly revenues and results of
operations.
The Company is continuing efforts to improve its existing internal
manufacturing capabilities and obtain commercial production of its FRAM
products through its alliance partners which the Company believes is essential
to its future profitability. During September 1996, the Company announced
that two of its FRAM product alliance partners issued press releases stating
that they will produce memory products based on the Company's ferroelectric
random access memory (FRAM (R)) technology. On September 3, 1996, Rohm
Company Limited announced that it will begin sample shipments of a 16 kilobit
serial FRAM memory with volume production beginning during the Company's
fourth quarter of 1996. Rohm also announced that it intends to introduce a
series of 4 kilobit and 64 kilobit FRAM memory products in the near future.
On September 30, 1996, Hitachi, Ltd. announced the world's first high-density
256 kilobit ferroelectric random access memory (FRAM) chip. Based on
Hitachi's announcement, the Company expects to begin receiving sample
shipments of the Hitachi-built 256 kilobit FRAM memory during the fourth
quarter of 1996, with volume production anticipated during the first half of
1997. The Company is also continuing its efforts to reduce the cost of its
FRAM products as well as developing for commercialization additional high-
density FRAM products.
The Company announced in October 1996 that its family of 12-nanosecond
enhanced dynamic random access memory products manufacturing by IBM are now
fully qualified. The Company and IBM entered a license and supply agreement
in May 1995. Customer delivery of such products will begin in November 1996.
The Company is continuing to pursue additional sources of EDRAM production.
The Company is also continuing its efforts to decrease the cost of its EDRAM
products, develop new higher and lower density products and enhance existing
designs to contribute to the operating results of the Company.
There can be no assurance that the Company's foundry and alliance partners
will be able to achieve commercial production of the products currently in
development or in the periods presented above. If such commercial production
is not achieved or is not achieved in a timely manner, the Company's results
of operations could be materially adversely affected.
<PAGE>
FACTORS AFFECTING FUTURE RESULTS
This quarterly report contains forward-looking statements including statements
regarding the timing and composition of revenues, future operating results and
the timing of product introductions, among others. Except for historical
information, the matters discussed in this report are forward-looking
statements that are subject to certain risks and uncertainties that could
cause the actual results to differ materially from those projected. Factors
that could cause actual results to differ materially include the following:
(i) the timely completion of the development and qualification for
manufacturing of the Company's new EDRAM and FRAM products; (ii) broader
customer acceptance of its EDRAM products and low-density FRAM products; (iii)
acceptance of new high-density FRAM products, which may be developed; (iv) the
Company's and its alliance partners' ability to manufacture its products on a
cost-effective and timely basis in the Company's own facility and through its
alliance foundry operations; (v) the Company's ability to perform under
existing alliance agreements and to develop new alliance relationships; (vi)
the availability and related cost of future financing; (vii) the retention of
key personnel; (viii) the outcome of the patent interference proceedings,
and (ix) factors not directly related to the Company, such as competitive
pressures on pricing, market conditions in general, competition, technological
progressions, product obsolescence and the changing needs of potential
customers and the semiconductor industry in general.
PART II - OTHER INFORMATION
Items 1 - 5 None
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.1* - Amendment to Agreement between the Company
and Fujitsu Limited dated August 30, 1996.
*Confidential treatment has been granted or requested with
respect to portions of this exhibit, and such confidential
portions have been deleted and separately filed with the
Securities and Exchange Commission pursuant to Rule 24b-2.
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports have been filed on Form 8-K
during this quarter.
RAMTRON INTERNATIONAL CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RAMTRON INTERNATIONAL CORPORATION
(Registrant)
November 13, 1996 /S/ Richard L. Mohr
Richard L. Mohr
Executive Vice President and
Chief Financial Officer
(Principal Accounting Officer)
AMENDMENT TO AGREEMENT
THIS AMENDMENT (the "Amendment") is entered into as of this 30th day of August
1996, by and between Ramtron International Corporation ("Ramtron"), a Delaware
corporation having its principal office at 1850 Ramtron Drive, Colorado
Springs, Colorado 80921, USA, and Fujitsu Limited ("Fujitsu"), a Japanese
corporation having its registered office at 1015 Kamikodanaka Nakahara-ku,
Kawaski-shi, Kanagawaken 211, Japan.
RECITALS
A. Ramtron and Fujitsu entered into that certain FRAM Technology License
Agreement executed by Ramtron on December 6, 1995 and by Fujitsu on December
19, 1995 (the "Agreement") pursuant to which Ramtron licensed to Fujitsu
certain of its proprietary ferroelectric technology for the design,
development, manufacture and sale of products based upon such ferroelectric
technology.
B. Ramtron and Fujitsu entered into a non-binding Memorandum of Understanding
dated December 19, 1995 (the "MOU"), wherein Ramtron and Fujitsu expressed
their mutual interest of cooperation concerning amending the Agreement to
provide Fujitsu the license to design, manufacture and sell products
containing embedded ferroelectric memory.
C. Ramtron and Fujitsu established the scope of work required to attain the
objectives of the MOU. This scope of work is set forth in Exhibit A-1, which
is attached hereto.
NOW, THEREFORE, Ramtron and Fujitsu agree as follows:
1. Definitions. Defined terms used herein shall have the meanings ascribed
to such terms in the Agreement, unless otherwise provided herein. In
addition, the following terms shall be defined as follows:
"Embedded FRAM Products" means standard nonvolatile ferroelectric
semiconductor memory monolithically combined with other control logic
or electronic functionality.
2. Section 1.6 (Definition of FRAM Product) is hereby amended to include the
following sentence:
FRAM Products include devices with only memory array and associated
memory array control logic.
3. Section 4.1.1 (Grant of License) of the Agreement is hereby amended to
include the following:
Subject to the terms and conditions set forth herein, Ramtron hereby
grants to Fujitsu a royalty-bearing, non-exclusive, non-transferable,
worldwide, perpetual license to use the Ramtron Technology, Ramtron
Intellectual Property Rights and/or Ramtron's Improvements to design,
develop, manufacture, make, sale, use, lease and transfer and other
disposition of Embedded FRAM Products. It is expressly agreed, however,
that Fujitsu is not granted a right to design, manufacture and/or sell
Embedded FRAM Products in any applications involving radio frequency
identification devices.
<PAGE>
4. Section 5.1.1 (Lump Sum Payment) is hereby amended to include the
following:
(d) **
(e) **
(f) **
5. Section 5.2 (Royalty Payments) shall be amended to include the following:
5.2.4 Fujitsu shall pay Ramtron a royalty on all Embedded FRAM Products
based upon and/or which use the FRAM Technology, Ramtron's IPR, and
Ramtron Improvements made thereto and sold by Fujitsu **
upon the first sale by Fujitsu of Embedded FRAM Products in an (i) amount
equal to ** . Any
dispute regarding the application of the royalty formula above or the
classification of product according to FRAM Products or Embedded FRAM
Products shall be resolved by the parties on a product by product basis
by the parties in good faith.
6. Section 6.1 (OEM/Foundry Agreement) of the Agreement shall be amended to
include the following:
Ramtron shall have the capacity rights to all Embedded FRAM Products
based upon a Fujitsu design, joint design or Ramtron design. The parties
shall start to negotiate a definitive OEM/Foundry Agreement, which shall
be completed concurrent with Fujitsu's election rights as set forth in
Article III or prior to the availability of engineering samples of
Embedded FRAM Products, whichever comes first. The OEM/Foundry Agreement
shall contain the material terms and conditions set forth in this Section
6.1 and Section 6.2 below. Ramtron shall have the right to purchase
Embedded FRAM Products from Fujitsu in an amount equal to **
Fujitsu's monthly Embedded FRAM Products manufacturing capacity or **
wafers per month of Embedded FRAM Products, ** ,
once Fujitsu first achieves manufacturing output of at least **
wafers per month. However, Fujitsu shall have the option to reject
Ramtron's capacity rights for particular custom products (i.e., Fujitsu
design), provided that Fujitsu is required to manufacture no more than **
Ramtron designs to the extent the total quantities of Embedded
FRAM Products based upon Ramtron's design, Fujitsu's design or a joint
design do not exceed in any event Ramtron's total capacity rights
hereunder. Ramtron's capacity rights for such Embedded FRAM Products
shall ** .
Ramtron shall provide Fujitsu with a one (1) year advance, rolling
purchase forecast and a six (6) month advance, rolling purchase
commitment. Royalty payment shall not apply to the Embedded FRAM
Products sold by Fujitsu to Ramtron.
7. Section 6.2 (Sales Price to Ramtron) shall be amended to include the
following:
In addition, packaged Embedded FRAM Products shall be sold to Ramtron at
** .
** . The parties will periodically
review pricing of FRAM Products and Embedded FRAM Products, recognizing
the requirement of Ramtron and Fujitsu each to derive reasonable profit
margins from the sale of their products. However, if Fujitsu reasonably
requests to change the price of FRAM Products and Embedded FRAM Products
for the purpose of avoiding "dumping" under the anti-dumping laws, both
parties shall discuss such price change in good faith.
<PAGE>
8. Sections 10.7, 10.8 and 10.9 replace all occurrences of "FRAM Products"
with "FRAM Products and/or Embedded FRAM Products."
9. MOU. Ramtron and Fujitsu signed an MOU dated December 19, 1995. The
parties agrees that this Amendment renders the MOU null and void.
10. No Other Changes. Except as expressly stated above, this Amendment does
not otherwise amend the Agreement, and the Agreement shall remain in full
force and effect, as amended hereby.
EXECUTED as of the day and year first above written.
RAMTRON INTERNATIONAL CORPORATION FUJITSU LIMITED
BY: /S/ Greg B. Jones BY: /S/ Ryusuke Hoshikawa
NAME: Greg B. Jones NAME: Ryusuke Hoshikawa
TITLE: President and COO TITLE: Member of the Board
and Group President
Logic LSI Group
<PAGE>
EXHIBIT A-1 TO AMENDMENT TO AGREEMENT
**
**Confidential treatment requested under Rule 24-b with respect to
this material.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,971
<SECURITIES> 0
<RECEIVABLES> 5,159
<ALLOWANCES> 459
<INVENTORY> 9,120
<CURRENT-ASSETS> 18,939
<PP&E> 22,295
<DEPRECIATION> 13,097
<TOTAL-ASSETS> 33,399
<CURRENT-LIABILITIES> 11,114
<BONDS> 0
<COMMON> 365
0
0
<OTHER-SE> 17,728
<TOTAL-LIABILITY-AND-EQUITY> 33,399
<SALES> 22,211
<TOTAL-REVENUES> 22,211
<CGS> 10,976
<TOTAL-COSTS> 28,744
<OTHER-EXPENSES> (176)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 237
<INCOME-PRETAX> (6,594)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,594)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,594)
<EPS-PRIMARY> ($.18)
<EPS-DILUTED> 0
</TABLE>
