Exhibit 99.1
NEWS RELEASE
IR Contacts:
Julia Harper
Chief Financial Officer
1-503-615-1250
julia.harper@radisys.com
Brian Bronson
Corporate Controller and Treasurer
RadiSys Corporation
1-503-615-1281
brian.bronson@radisys.com
RadiSys Announces Q1 results
HILLSBORO, OR -- April 16, 2003 -- RadiSys Corporation (Nasdaq: RSYS), a
leading global provider of embedded systems, reported revenues of $48.4 million
for the quarter ended March 31, 2003, a 2% increase from $47.3 million last
quarter, and down 8% from the same period a year ago. The net loss for the
quarter was $4.2 million, or $.24 per share (diluted), versus a net loss of $0.7
million, or $.04 per share (diluted), a year ago. The results for the quarter
ended March 31, 2003 include a $1.8 million restructuring charge, a $4.7 million
loss on discontinued operations, and a gain of $825 thousand associated with the
buyback of $10.3 million face value of the Company's convertible subordinated
notes.
"I'm very pleased that we were able to deliver sequential revenue growth
in a challenging economic environment," stated Scott Grout, CEO. "Our growing
revenue, combined with our proactive cost management efforts, will allow us to
drive increasing levels of profitability moving forward. Specifically, gross
margin increased a full percentage point to 31.4% this quarter and ongoing
operating expenses were reduced by $1.3 million from the prior quarter's level.
At the same time we continue to invest strongly in the future, spending $5.5
million on R&D and achieving ten new design wins in leading edge compute and
networking applications such as security (firewalls and VPNs), signaling, and
advanced medical imaging."
The quarter included a $1.8 million restructuring charge, which was
previously announced on January 13, 2003, primarily associated with increasing
levels of outsourced manufacturing for product cost reduction. As previously
stated, we believe these actions will result in quarterly savings of
approximately $2 million, relative to the fourth quarter of 2002, when fully
realized in the second quarter.
-more-
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The results for the quarter also include a $4.7 million loss on
discontinued operations. The loss is attributable to the $4.3 million loss from
the sale of the Savvi business, which included $4.1 million of goodwill and
intangibles. The $4.7 million loss also includes $0.4 million of expenses
incurred this quarter before the business unit was sold. The intention to sell
the Savvi business was previously announced on January 13, 2003 and the
transaction successfully closed in the quarter.
RadiSys achieved ten new design wins in the quarter. RadiSys characterizes
a design win as a project estimated to produce more than $500 thousand in
revenue per year when in production. Four of the wins are significantly larger,
each of which is estimated to produce more than $2 million in revenue per year
once in full production. Of the ten wins, four are in Commercial Systems, four
are in Service Provider Systems and two are in Enterprise Systems. Design wins
ramp into production volume at varying rates, on average the ramp begins about
twelve months after the win occurs.
Business Outlook
The following statements are based on current expectations. These
statements are forward-looking, and actual results may differ materially.
Commenting on the outlook, Scott Grout, CEO, said "We currently expect to
see revenue levels for the second quarter up slightly from the first quarter. We
feel good about our current cost structure and expect earnings to improve as
well."
"We are energized by the possibilities for continued growth despite the
difficult economic climate," stated Scott Grout, CEO. "Our revenue growth and
improving profitability will allow us to maintain a differentiated position as a
leading provider of embedded systems into multiple end markets."
RadiSys will provide more details about first quarter 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
1-877-505-0447, password is RadiSys, or listening via live audio webcast on the
RadiSys web-site at www.radisys.com. Replays of the call will be available
through June 6, 2003 at 1-800-642-1687, password is 9361224, or via audio
webcast at www.radisys.com.
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RadiSys is a leading global provider of embedded solutions to the
Commercial Systems, Enterprise Systems, and Service Provider Systems markets.
Using its extensive expertise in a wide variety of technologies, RadiSys focuses
on industry-leading architecture while working in a close "virtual division"
relationship with its customers -- significantly improving their time-to-market
advantage and reducing cost. The broad range of RadiSys product offerings
include board-level embedded computers; blade servers; motherboards; network
interfaces and packet processing engines; communications middleware and software
such as SS7/IP internetworking and protocol stacks; platforms based on PCI,
CompactPCI, CompactPCI 2.16 and ATCA; turnkey gateway systems and professional
services.
For more information, contact RadiSys at info@radisys.com or
http://www.radisys.com or call 800-950-0044 or 503-615-1100. For press
information only: Lyn Pangares, RadiSys Corporation, 503-615-1220.
RadiSys is a registered trademark. All other products are trademarks or
registered trademarks of their respective companies.
# # #
This press release contains forward-looking statements, including the statements
concerning estimated revenue from design wins, the typical production volume
ramp of design wins, and restructuring charges and anticipated savings. Scott
Grout's statements about the Company being positioned for future profitability,
the Company's guidance for the second quarter, particularly with respect to
anticipated revenues and earnings in the second quarter, also constitute
forward-looking statements. Actual results could differ materially from those
projected in these forward-looking statements as a result of a number of risk
factors, including the cyclical nature of our customers businesses; the
Company's dependence on a few customers; schedule delays or cancellations in
design wins; the Company's dependence on a few suppliers; intense competition;
execution of the development or production ramp for design wins; political,
economic and regulatory risks associated with international operations,
including interest rate and currency exchange rate fluctuations; the inability
to protect RadiSys' intellectual property or successfully defend against
infringement claims by others; disruptions in the general economy and in the
Company's business, including disruptions of cash flow and the Company's normal
operations, that may result from terrorist attacks or armed conflict,
particularly in the Middle East, and other 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, 2002, a copy of which
may be obtained by contacting the Company's investor relations department at
503-615-7797 or at the Company's investor relations website at
http://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 release is as of April 16, 2003. 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.
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RadiSys Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended
(unaudited)
March 31, March 31,
2003 2002
--------- ---------
Revenues $ 48,404 $ 52,699
Cost of sales 33,207 37,986
-------- --------
Gross margin 15,197 14,713
Research and development 5,540 7,386
Selling, general and administrative 6,548 7,910
Intangible assets amortization 765 778
Restructuring charges 1,829 --
-------- --------
Income (loss) from operations 515 (1,361)
Gain on repurchase of convertible notes 825 1,355
Interest expense, net (406) (808)
Other expense, net (492) (222)
-------- --------
Income (loss) from continuing operations before income tax expense (benefit) 442 (1,036)
Income tax expense (benefit) 9 (775)
-------- --------
Income (loss) from continuing operations 433 (261)
-------- --------
Discontinued operations related to Savvi:
Loss from discontinued operations (including loss on disposal of $4,286) (4,679) (870)
Income tax benefit -- (478)
-------- --------
Net loss $ (4,246) $ (653)
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Net income (loss) per share from continuing operations (basic) $ 0.02 $ (0.01)
======== ========
Net income (loss) per share from continuing operations (diluted) $ 0.02 $ (0.01)
======== ========
Net loss per share (basic) $ (0.24) $ (0.04)
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Net loss per share (diluted) $ (0.24) $ (0.04)
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Weighted average shares from continuing operations (basic) 17,673 17,407
======== ========
Weighted average shares from continuing operations (diluted) 17,840 17,407
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Weighted average shares (basic) 17,673 17,407
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Weighted average shares (diluted) 17,673 17,407
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RadiSys Corporation
Consolidated Balance Sheets
(in thousands)
ASSETS
March 31,
2003 December 31,
(unaudited) 2002
----------- ------------
Current assets
Cash and cash equivalents $ 26,191 $ 33,138
Short-term investments 59,917 72,661
Accounts receivable, net 29,924 27,473
Inventories, net 27,596 24,864
Other current assets 3,748 4,361
Deferred tax assets 7,454 7,521
--------- ---------
Total current assets 154,830 170,018
Property and equipment, net 24,458 25,882
Goodwill, net 27,521 29,969
Intangible assets, net 8,716 11,159
Long-term investments 23,766 13,128
Long-term deferred tax assets 21,212 21,437
Other assets 2,260 2,706
--------- ---------
Total assets $ 262,763 $ 274,299
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 21,002 $ 18,933
Accrued wages and bonuses 4,208 4,879
Accrued interest payable 476 1,643
Accrued restructuring 4,800 5,178
Other accrued liabilities 8,967 6,911
--------- ---------
Total current liabilities 39,453 37,544
--------- ---------
Long-term liabilities
Convertible subordinated notes 67,374 77,366
Mortgage payable 6,565 6,588
--------- ---------
Total long-term liabilities 73,939 83,954
--------- ---------
Total liabilities 113,392 121,498
--------- ---------
Shareholders' equity
Common stock, 100,000 shares authorized,
17,729 and 17,605 shares issued and
outstanding 162,186 161,485
Accumulated other comprehensive loss:
Cumulative translation adjustment 1,302 1,230
Unrealized gain on securities 154 111
Accumulated deficit (14,271) (10,025)
--------- ---------
Total shareholders' equity 149,371 152,801
--------- ---------
Total liabilities and shareholders' equity $ 262,763 $ 274,299
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