May 17, 2012 — RadiSys

HILLSBORO, OR — April 24, 2012— Radisys Corporation (NASDAQ: RSYS), a leading provider of infrastructure solutions for telecom, aerospace, defense and public safety applications, announced revenues for the first quarter of $75.5 million and non-GAAP revenue of $75.7 million. First quarter GAAP net loss was $4.8 million or $0.18 per share and non-GAAP net income was $1.5 million or $0.05 per diluted share. First quarter non-GAAP results exclude the impact of purchase accounting adjustments, amortization of acquired intangible assets, stock-based compensation and restructuring and acquisition-related charges. A reconciliation of GAAP to non-GAAP results is located in the tables below.

Commenting on the first quarter results, Mike Dagenais, Radisys’ Chief Executive Officer stated, “Our first quarter performance came in as expected. Solid shipments in both our and Software & Solutions product groups, which combined grew 60% year on year, enabled non-GAAP gross margins of nearly 34%. We also were able to drive lower costs relative to our plan due to the ongoing focus on improving efficiencies throughout the organization. We expect these efforts to result in additional 2012 expense synergies.”

Mr. Dagenais went on to say, “We had another good design win quarter with customers continuing to validate our strategy by awarding us wins that combine our hardware and software technology and leverage our professional services in unique ways. High margin wins for a network load balancer, femto gateway, and mobile ‘Push-to-Talk’ application aimed at the defense market are good examples from this last quarter that demonstrate our capability of bringing unique solutions to our customers. In addition, we had numerous design wins within our COMe product lines for use in military and communication applications.”

First Quarter Financial Highlights

 GAAP revenue was $75.5 million and non-GAAP revenue was $75.7 million. ATCA and Software & Solutions Revenues were $49.7 million, up 60% Year over Year and growing to 66% of Total Revenue.

 GAAP gross margin was 30.5%. Non-GAAP gross margin was 33.8% and represents a 5 percentage point increase from the same quarter last year, primarily resulting from improved product mix.

 Total GAAP Research and Development (R&D) and Selling, General and Administrative (SG&A) expenses were $24.5 million and non-GAAP R&D and SG&A expenses were $23.6 million, down $3.3 million from the prior quarter as result of integration synergies.

 Cash consumed from operating activities was $0.9 million and was in line with expectations. Cash and cash equivalents were $43.8 million at the end of the first quarter, down from $47.8 million at the end of the fourth quarter primarily due to acquisition related activities including severance related payouts and capital expenditures.

Financial Outlook

Second Quarter 2012 Outlook

 Revenue: Non-GAAP revenue is expected to be between $80 and $86 million representing an approximate $7 million or 10% increase from the first quarter. ATCA and Software & Solutions revenue is expected to drive the majority of the increase as end customer deployments from previous design wins begin ramping. All other revenue categories are expected to be slightly up when compared to the first quarter.

 Gross Margin: Second quarter non-GAAP gross margin rate is expected to be between 35% and 37%.

 Operating Expenses: Second quarter non-GAAP R&D and SG&A expenses are expected to increase by as much as $1 million sequentially as a result of increased R&D associated with 40 gig ATCA products nearing production release.

 EPS: Second quarter non-GAAP net income is expected to be between $0.13 and $0.18 per diluted share.

Mr. Dagenais went on to say, “While we have seen some near term softening from our largest customer, our business fundamentals and prospects for long term profitable growth remain unchanged. Our customers are continuing to show they value our unique capabilities as they seek to resolve their network capacity challenges. The integration of Continuous Computing is going well and yielding better than expected cost synergies that position us very well for delivering long term revenue and profit growth.”

Conference Call and Web-cast Information

Radisys will host a conference call on Tuesday, April 24, 2012 at 5:00 p.m. ET to discuss the first quarter 2012 results, the financial and business outlook for the second quarter.

To participate in the live conference call, dial (888) 333-0027 in the U.S. and Canada or (706) 634-4990 for all other countries and reference conference ID# 70408416. The live conference call will also be available via webcast on the Radisys investor relations website at

A replay of the conference call will be available two hours after the call is complete until 11:59 p.m. ET on Tuesday, May 8, 2012. To access the replay, dial (855) 859-2056 or (404) 537-3406 with conference ID# 70408416. A replay of the webcast will be available for an extended period of time on the Radisys investor relations website at

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