Exhibit 99.1
IR Contacts:
Julia Harper
Chief Financial Officer
503-615-1250
julia.harper@radisys.com
Brian Bronson
VP of Finance and Business Development
RadiSys Corporation
503-615-1281
brian.bronson@radisys.com
RadiSys Announces Fourth quarter and year-end Results
Full year revenues and earnings up over prior year
HILLSBORO, OR — February 2, 2006— RadiSys Corporation (Nasdaq: RSYS), a leading global provider of advanced embedded systems, reported revenues of $61.9 million for the quarter ended December 31, 2005. Net income for the quarter was $4.9 million, or $.20 per diluted share, versus net income of $2.8 million, or $.13 per diluted share, a year ago. The results for the fourth quarter include a tax benefit of $2.2 million, or $.08 per share, associated primarily with a projected increase in future utilization of deferred tax assets. For the year ended December 31, 2005, revenues were $260.2 million, which is up from $245.8 million for the year ended December 31, 2004. Net income for the year ended December 31, 2005 was $16.0 million, or $.68 per diluted share, compared to net income of $13.0 million, or $.59 per diluted share for the year ended December 31, 2004.
“Overall, I am very pleased with our progress in 2005,” said Scott Grout, Chief Executive Officer. “Although our fourth quarter wireless infrastructure revenue finished below our original expectations, we delivered another year of revenue and earnings growth and increased our net cash position by approximately $35 million in the year. Strategically, we made very significant progress on our new products such as ATCA and Com-E, to position ourselves to take advantage of what we believe are large emerging opportunities in our target markets. In the fourth quarter, we closed additional business with our new Promentum and Procelerant product lines in applications such as broadband wireless packet networks, IP telephony, QOS management, multimedia messaging and industrial and medical imaging systems.”
In conjunction with the 3GSM trade show later this month in Barcelona, Spain, the Company will formally introduce the Promentum SYS-6010, a 10 Gigabit ATCA application ready platform targeted for use in high-bandwidth dataplane applications. Until now, ATCA has principally been targeted for use in ancillary network control applications such as session setup, monitoring and management. With the introduction of the Promentum SYS-6010 platform, RadiSys expands the domain of use for ATCA into core traffic-bearing applications that require significantly greater bandwidth and traffic processing capabilities. The Promentum SYS-6010 will deliver the highest speed I/O, switching and packet processing capacities to be implemented in an ATCA system. Scheduled for early availability mid-2006, this solution will be implemented in a highly flexible and reliable architecture that includes comprehensive system management capability. The SYS-6010 is targeted at applications such as IMS (IP Multimedia Subsystem), Radio Network Controllers, Base Station Controllers, Media Gateways, and Call Servers.
Business Outlook
The following statements are based on current expectations as of the date of this press release. These statements are forward-looking, and actual results may differ materially. The Company assumes no obligation to update these statements.
Commenting on the business outlook, Scott Grout, CEO, said, “For the first quarter, we currently expect to see revenues of $64 to $67 million and diluted earnings per share, excluding stock compensation expense of approximately $1 million, in the range of $0.10 to $0.12. We expect revenue to be sequentially higher as our wireless business moves toward recent run-rate levels.
In closing, Mr. Grout stated, “Our team has made tremendous progress over the past year. We are confident that our strategy will put us in a position of strength to capitalize on the growing movement toward standards-based platforms across our target markets. We are still in the early and defining days of this movement and we believe that our customer intimacy, market-leading products and technologies and talented global team, will put us in a leadership role as this market opportunity unfolds.”
RadiSys will provide more details about the reported results and current outlook during a conference call scheduled for 5 PM Eastern Time today. The public is invited to participate in the conference call by either calling 1-888-333-0027 and referencing conference ID# 3970936 or listening via live audio webcast on the RadiSys web-site atwww.radisys.com. Replays of the call will be available through February 17, 2006 at 1-800-642-1687 for domestic dial-in, 706-645-9291 for international dial-in, referencing conference ID# 3970936, or via audio webcast at:www.radisys.com.
About RadiSys
RadiSys (Nasdaq: RSYS) is a leading provider of advanced embedded solutions for the Communications Networking and Commercial Systems markets. Through intimate customer collaboration, and combining innovative technologies and industry leading architecture, RadiSys helps OEMs bring better products to market faster and more economically. RadiSys products include embedded boards, platforms and systems, which are used in today’s complex computing, processing and network intensive applications.
RadiSys, Procelerant and Promentum are registered trademarks of RadiSys Corporation.
Use of Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with GAAP, the financial outlook statements in the Company’s earnings release contain non-GAAP financial measures that exclude the effects of non-cash, equity-based stock compensation expense recognized as a result of the Company’s adoption of FAS 123R. Beginning with the first quarter 2006 earnings release, the Company will include non-GAAP financial measures of its financial results for the reporting period that exclude the income statement effects of non-cash, equity-based stock compensation expense. The Company believes that the presentation of results excluding non-cash, equity-based stock compensation expense will provide meaningful supplemental information to investors that are indicative of the Company’s core operating results. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and reconciliations between GAAP and non-GAAP financial measures should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures by other companies.
Forward-looking Statements
This press release contains forward-looking statements, including the statements about the Company’s guidance for the first quarter, particularly with respect to anticipated revenues, diluted earnings per share, the amount of stock compensation expense and our business strategy. Actual results could differ materially from our guidance and expectations in these forward-looking statements as a result of a number of risk factors, including, the risk factors listed from time to time in RadiSys’ SEC reports, including those listed under “Risk Factors” in RadiSys’ Annual Report on Form 10-K for the year ended December 31, 2004, and in the RadiSys Quarterly Reports on Form 10-Q filed with the SEC each fiscal quarter, and other filings with the SEC, copies of which may be obtained by contacting the Company at 503-615-1100 or from the Company’s investor relations web site athttp://www.RadiSys.com. Although forward-looking statements help provide complete information about RadiSys, investors should keep in mind that forward-looking statements are inherently less reliable than historical information. All information in this press release is as of February 2, 2006. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.
For press information only: Lyn Pangares, RadiSys Corporation, 503-615-1220,lyn.pangares@radisys.com.
RADISYS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
| | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Year Ended | |
| | | December 31, | | | December 31, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| Revenues | | $ | 61,905 | | | $ | 62,710 | | | $ | 260,234 | | | $ | 245,824 | |
| Cost of sales | | | 44,725 | | | | 42,464 | | | | 183,398 | | | | 166,652 | |
| | | | | | | | | | | | | |
| Gross margin | | | 17,180 | | | | 20,246 | | | | 76,836 | | | | 79,172 | |
| Research and development | | | 7,571 | | | | 7,690 | | | | 29,784 | | | | 28,214 | |
| Selling, general and administrative | | | 7,509 | | | | 7,365 | | | | 30,084 | | | | 30,448 | |
| Intangible assets amortization | | | 513 | | | | 514 | | | | 2,052 | | | | 2,226 | |
| Restructuring and other charges | | | 127 | | | | 1,442 | | | | 1,128 | | | | 1,012 | |
| | | | | | | | | | | | | |
| Income from operations | | | 1,460 | | | | 3,235 | | | | 13,788 | | | | 17,272 | |
| Loss on repurchase of convertible subordinated notes | | | (46 | ) | | | — | | | | (50 | ) | | | (387 | ) |
| Interest expense | | | (457 | ) | | | (545 | ) | | | (2,053 | ) | | | (3,565 | ) |
| Interest income | | | 2,017 | | | | 986 | | | | 6,337 | | | | 3,416 | |
| Other expense, net | | | (270 | ) | | | (234 | ) | | | (879 | ) | | | (472 | ) |
| | | | | | | | | | | | | |
| Income before income tax provision (benefit) | | | 2,704 | | | | 3,442 | | | | 17,143 | | | | 16,264 | |
| Income tax provision (benefit) | | | (2,181 | ) | | | 606 | | | | 1,185 | | | | 3,253 | |
| | | | | | | | | | | | | |
| Net income | | $ | 4,885 | | | $ | 2,836 | | | $ | 15,958 | | | $ | 13,011 | |
| | | | | | | | | | | | | |
| Net income per share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.24 | | | $ | 0.15 | | | $ | 0.79 | | | $ | 0.69 | |
| | | | | | | | | | | | | |
| Diluted | | $ | 0.20 | | | $ | 0.13 | | | $ | 0.68 | | | $ | 0.59 | |
| | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 20,543 | | | | 19,296 | | | | 20,146 | | | | 18,913 | |
| | | | | | | | | | | | | |
| Diluted | | | 25,231 | | | | 24,085 | | | | 24,832 | | | | 23,823 | |
| | | | | | | | | | | | | |
RADISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
| | | | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2005 | | | 2004 | |
| | | (Unaudited) | | | | | |
ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 90,055 | | | $ | 80,566 | |
| Short-term investments, net | | | 135,800 | | | | 78,303 | |
| Accounts receivable, net | | | 39,055 | | | | 42,902 | |
| Other receivables | | | 3,886 | | | | 2,808 | |
| Inventories, net | | | 21,629 | | | | 22,154 | |
| Other current assets | | | 2,426 | | | | 2,675 | |
| Deferred tax assets | | | 4,033 | | | | 4,216 | |
| | | | | | | |
| Total current assets | | | 296,884 | | | | 233,624 | |
| Property and equipment, net | | | 13,576 | | | | 14,002 | |
| Goodwill | | | 27,463 | | | | 27,521 | |
| Intangible assets, net | | | 2,159 | | | | 4,211 | |
| Long-term investments, net | | | — | | | | 39,750 | |
| Long-term deferred tax assets | | | 25,000 | | | | 23,224 | |
| Other assets | | | 4,082 | | | | 2,906 | |
| | | | | | | |
| Total assets | | $ | 369,164 | | | $ | 345,238 | |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 36,903 | | | $ | 31,585 | |
| Accrued wages and bonuses | | | 4,829 | | | | 5,626 | |
| Accrued interest payable | | | 224 | | | | 378 | |
| Accrued restructuring | | | 856 | | | | 1,569 | |
| Other accrued liabilities | | | 8,279 | | | | 7,832 | |
| | | | | | | |
| Total current liabilities | | | 51,091 | | | | 46,990 | |
| | | | | | | |
| Long-term liabilities: | | | | | | | | |
| Convertible senior notes, net | | | 97,279 | | | | 97,148 | |
| Convertible subordinated notes, net | | | 2,498 | | | | 9,867 | |
| | | | | | | |
| Total long-term liabilities | | | 99,777 | | | | 107,015 | |
| | | | | | | |
| Total liabilities | | | 150,868 | | | | 154,005 | |
| | | | | | | |
| Shareholders’ equity : | | | | | | | | |
| Preferred stock — $.01 par value, 10,000 shares authorized; none issued or outstanding | | | — | | | | — | |
| Common stock — no par value, 100,000 shares authorized; 20,703 and 19,655 shares issued and outstanding at December 31, 2005 and December 31, 2004 | | | 193,839 | | | | 182,705 | |
| Retained earnings | | | 20,275 | | | | 4,317 | |
| Accumulated other comprehensive income: | | | | | | | | |
| Cumulative translation adjustments | | | 4,182 | | | | 4,211 | |
| | | | | | | |
| Total shareholders’ equity | | | 218,296 | | | | 191,233 | |
| | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 369,164 | | | $ | 345,238 | |
| | | | | | | |
