Radisys Reports First Quarter Results

  Radisys Reports First Quarter Results

  *Revenue of $68.2 million; ATCA and Software-Solutions of $46.5 million
    accounted for 68% of total revenue.
  *First quarter platform design wins expected to result in approximately $60
    million of revenue over the next five years.
  *First quarter revenue includes our first revenue generating shipments of
    our new Media Resource Function (MRF), the MPX-12000, which will provide
    Rich Communication Services (RCS) capabilities in a network being rolled
    out by a tier one carrier in Asia.
  *The Company's operational initiatives showed tangible results with
    inventory declining sequentially from the fourth quarter by 17% to $24
    million, the lowest level in nearly two years.
  *Successfully completed the sale of a non-strategic asset resulting in $1.7
    million of cash payments through the end of the second quarter 2013.

Business Wire

HILLSBORO, Ore. -- April 25, 2013

Radisys Corporation (NASDAQ: RSYS), a market leader enabling wireless
infrastructure solutions for telecom, aerospace, and defense applications,
announced first quarter 2013 revenues of $68.2 million and a GAAP net loss of
$6.6 million or $0.23 per share. First quarter non-GAAP net loss was $0.1
million or $0.00 per diluted share. First quarter non-GAAP results exclude the
amortization of acquired intangible assets, stock-based compensation,
restructuring and acquisition-related charges, and non-cash tax expense. A
reconciliation of GAAP to non-GAAP results is located in the tables included
at the end of this press release.

Commenting on the first quarter results, Brian Bronson, Radisys' President and
Chief Executive Officer, stated, “I am pleased that along with successfully
meeting a number of key product development and operational objectives set
seven months ago, our first quarter revenue and profitability met our
guidance. During the first quarter, we released essential features that
enabled the recognition of our first MPX-12000 (MRF) revenue. The funnel for
our new MRF is strong and we are in multiple trials with carriers in Voice
over LTE applications as well as enabling RCS in the IP Multimedia Subsystem
(IMS) core. We also are seeing nice traction in our solutions business which
takes our breadth of technology to develop products for our customers such as
load balancing, edge routing, intelligent gateways and compact packet cores.”

First Quarter Financial Highlights

  *Revenue of $68.2 million; ATCA and Software-Solutions revenue of $46.5
    million accounted for 68% of revenue.
  *Achieved platform design wins in several key markets such as deep packet
    inspection and intelligent gateways. These design wins spanned 19
    customers, eight of which were new to Radisys.
  *GAAP gross margin was 29% and Non-GAAP gross margin was 32%. An
    anticipated sequential quarterly decrease in Software-Solutions revenue
    resulted in a one percentage point decline in gross margin when compared
    to the fourth quarter 2012.
  *Total GAAP Research and Development (R&D) and Selling, General and
    Administrative (SG&A) expenses were $22.6 million and non-GAAP R&D and
    SG&A expenses were $21.7 million; representing a $0.3 million sequential
    reduction when compared to the fourth quarter 2012.
  *Cash and cash equivalents were $31.7 million at the end of the first
    quarter; a $1.4 million sequential decrease from the fourth quarter. On
    February 14, 2013, we repaid $16.9 million of our convertible notes. As of
    March 31, 2013, we had $15.0 million outstanding on our Silicon Valley
    Bank line of credit. Net of changes in debt, cash increased $0.5 million
    from the fourth quarter 2012.

Second Quarter 2013 Outlook

  *Revenue is expected between $63 million and $69 million.
  *Non-GAAP gross margin rate is expected to rise to approximately 34% to 36%
    of sales. A sequential quarterly increase in Software-Solutions revenue is
    expected to positively affect overall gross margins.
  *Non-GAAP R&D and SG&A expenses are expected to remain relatively flat.
  *Non-GAAP net income is expected to be between a loss of $0.03 and a profit
    of $0.09 per diluted share.
  *The Company expects to generate positive cash flow in the second quarter.

Mr. Bronson continued, “Over the last several months, I've spent a significant
amount of time meeting with our customers and employees around the globe. I am
more convinced than ever that the strategic and operational changes we have
made position us well for profitable growth as our customers recognize and
value the unique and cost effective ways we enable their products. We will
continue to focus our entire organization on the significant market
opportunities we have with our MRF, platform, small cell, and solution

Conference Call and Webcast Information

Radisys will host a conference call on Thursday, April 25, 2013 at 5:00 p.m.
ET to discuss its first quarter 2013 results and the financial and business
outlook for the second quarter 2013.

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# 93733326. The live conference call will also be available via webcast on
the Radisys investor relations website at http://investor.radisys.com/.

A replay of the conference call will be available two hours after the call is
complete until 11:59 p.m. ET on Thursday, May 9, 2013. To access the replay,
dial (855) 859-2056 or (404) 537-3406 with conference ID# 93733326. A replay
of the webcast will be available for an extended period of time on the Radisys
investor relations website at http://investor.radisys.com/.

Forward-Looking Statements

This press release contains forward-looking statements, including statements
about the Company's business strategy, financial outlook and expectations for
the second quarter of 2013 and statements related to expense savings or
reductions, operational and administrative efficiencies, revenue growth,
margin improvement, financial performance and other attributes of the Company.
These forward-looking statements are based on the Company's expectations and
assumptions, as of the date such statements are made, regarding the Company's
future operating performance and financial condition, the economy and other
future events or circumstances. Actual results could differ materially from
the outlook guidance and expectations in these forward-looking statements as a
result of a number of risk factors, including, among others, (a) the Company's
dependence on certain customers and high degree of customer concentration, (b)
the Company's use of one contract manufacturer for a significant portion of
the production of its products, (c) the anticipated amount and timing of
revenues from design wins due to the Company's customers' product development
time, cancellations or delays, (d) matters affecting the embedded system
industry, including changes in industry standards, changes in customer
requirements and new product introductions, (e) actions by regulatory
authorities or other third parties, (f) cash generation, (g) changes in tariff
and trade policies and other risks associated with foreign operations, (h)
fluctuations in currency exchange rates, (i) the ability of the Company to
successfully complete any acquisition or divestiture activities, (j) the
Company's ability to successfully manage the transition from 10G to 40G ATCA
product technologies, (k) performance and customer acceptance of the Trillium
line of products, and (l) other factors listed in the Company's reports filed
with the Securities and Exchange Commission (SEC), including those listed
under “Risk Factors” in Radisys' Annual Report on Form 10-K for the year ended
December 31, 2012, copies of which may be obtained by contacting the Company
at 503-615-1100, from the Company's investor relations web site at
http://investor.radisys.com/, or at the SEC's website at http://www.sec.gov.
Although forward-looking statements help provide additional information about
Radisys, investors should keep in mind that forward-looking statements are
inherently less reliable than historical information. Should one or more of
these risks or uncertainties materialize (or the other consequences of such a
development worsen), or should underlying assumptions prove incorrect, actual
outcomes may vary materially from those forecasted or expected. The Company
believes its expectations and assumptions are reasonable, but there can be no
assurance that the expectations reflected herein will be achieved. All
information in this press release is as of April 25, 2013. 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.

Non-GAAP Financial Measures

To supplement its consolidated financial statements in accordance with
generally accepted accounting principles (GAAP), the Company's earnings
release contains non-GAAP financial measures that exclude certain expenses,
gains and losses, such as the effects of (a) purchase accounting adjustments,
(b) amortization of acquired intangible assets, (c) stock-based compensation
expense, (d) restructuring and acquisition-related charges (reversals), net,
(e) impairment of goodwill, and (f) non-cash income tax expense. The Company
believes that the use of non-GAAP financial measures provides useful
information to investors to gain an overall understanding of its current
financial performance and its prospects for the future. Specifically, the
Company believes the non-GAAP results provide useful information to both
management and investors by excluding certain expenses, gains and losses that
the Company believes are not indicative of its core operating results. In
addition, non-GAAP financial measures are used by management for budgeting and
forecasting as well as subsequently measuring the Company's performance, and
the Company believes that it is providing investors with financial measures
that most closely align to its internal measurement processes. These non-GAAP
measures are considered to be reflective of the Company's core operating
results as they more closely reflect the essential revenue-generating
activities of the Company and direct operating expenses (resulting in cash
expenditures) needed to perform these revenue-generating activities. The
Company also believes, based on feedback provided to the Company during its
earnings calls' Q&A sessions and discussions with the investment community,
that the non-GAAP financial measures it provides are necessary to allow the
investment community to construct their valuation models to better align its
results and projections with its competitors and market sector, as there is
significant variability and unpredictability across companies with respect to
certain expenses, gains and losses.

The non-GAAP financial information is presented using a consistent methodology
from quarter-to-quarter and year-to-year. These measures should be considered
in addition to results prepared in accordance with GAAP. In addition, these
non-GAAP financial measures are not based on any comprehensive set of
accounting rules or principles. The Company believes that non-GAAP financial
measures have limitations in that they do not reflect all of the amounts
associated with the Company's results of operations as determined in
accordance with GAAP and that these measures should only be used to evaluate
the Company's results of operations in conjunction with the corresponding GAAP
financial measures.

A reconciliation of non-GAAP information to GAAP information is included in
the tables below. 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 included in this earnings release 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 used by other companies.

About Radisys

Radisys (NASDAQ: RSYS) is a market leader enabling wireless infrastructure
solutions for telecom, aerospace, and defense applications. Radisys'
market-leading ATCA, IP Media Server and Com Express platforms coupled with
world-renowned Trillium software, services and market expertise enable
customers to bring high-value products and services to market faster with
lower investment and risk. Radisys solutions are used in a wide variety of 3G
& 4G / LTE mobile network applications including: Radio Access Networks (RAN)
solutions from femtocells to picocells and macrocells, wireless core network
applications, Deep Packet Inspection (DPI) and policy management; conferencing
and media services including voice, video and data, as well as customized
mobile network applications that support the aerospace, defense and public
safety markets.

         Radisys® and Trillium® are registered trademarks of Radisys.

(In thousands, except per share amounts, unaudited)
                                      Three Months Ended
                                      March 31,
                                      2013                   2012
Revenues                              $   68,178               $   75,487
Cost of sales:
Cost of sales                         46,306                   50,005
Amortization of purchased             2,217                   2,442        
Gross margin                          19,655                   23,040
Operating expenses:
Research and development              11,535                   12,546
Selling, general and                  11,096                   12,000
Intangible assets                     1,304                    1,304
Restructuring and
acquisition-related                   1,270                   1,444        
charges, net
Loss from operations                  (5,550       )           (4,254       )
Interest expense                      (332         )           (421         )
Other income, net                     147                     164          
Loss before income tax                (5,735       )           (4,511       )
Income tax expense                    822                     304          
Net loss                              $   (6,557   )           $   (4,815   )
Net loss per share:
Basic                                 $   (0.23    )           $   (0.18    )
Diluted (I),(II)                      $   (0.23    )           $   (0.18    )
Weighted average shares
Basic                                 28,470                  26,656       
Diluted (I),(II)                      28,470                  26,656       

(I) For the three months ended March 31, 2013 and 2012, the computation of
diluted earnings per share excludes the effects of the Company's 2013 and 2015
convertible senior notes, as they are anti-dilutive.

(II) For the three months ended March 31, 2013 and 2012, the computation of
earnings per share excludes the effects of stock options, restricted stock
units and escrow shares, as they are anti-dilutive.

(In thousands, unaudited)

                                              March 31,     December 31,
                                                 2013            2012
Current assets:
Cash and cash equivalents                        $ 31,748        $  33,182
Accounts receivable, net                         50,467          51,289
Inventories and inventory deposit, net           24,034          28,907
Other current assets                             11,471         12,610     
Total current assets                             117,720         125,988
Property and equipment, net                      17,698          17,713
Goodwill and intangible assets, net              66,763          70,284
Other assets, net                                14,110         18,409     
Total assets                                     $ 216,291      $  232,394 
Current liabilities:
Accounts payable                                 $ 37,462        $  41,191
Deferred income                                  7,480           9,222
Other accrued liabilities                        13,924          16,769
Convertible senior notes, net                    —               16,919
Line of credit                                   15,000         —          
Total current liabilities                        73,866         84,101     
Convertible senior notes, net                    18,000          18,000
Other long-term liabilities                      4,314          4,851      
Total liabilities                                96,180         106,952    
Shareholders' equity:
Common stock                                     305,036         303,724
Accumulated deficit                              (186,243  )     (179,686   )
Accumulated other comprehensive income           1,318          1,404      
Total shareholders’ equity                       120,111        125,442    
Total liabilities and shareholders’ equity       $ 216,291      $  232,394 

(In thousands, unaudited)

                                                  Three Months Ended
                                                     March 31,
                                                     2013         2012
Cash flows from operating activities:
Net loss                                             $ (6,557 )     $ (4,815 )
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization                        5,524          5,638
Stock-based compensation expense                     1,099          922
Write off of purchased computer software             3,068          —
Net gain from sale of software assets                (1,575   )     —
Other adjustments                                    465            719
Changes in operating assets and liabilities:
Accounts receivable                                  1,330          1,898
Inventories and inventory deposit                    4,381          4,738
Accounts payable                                     (4,231   )     (1,496   )
Deferred income                                      (1,775   )     (3,380   )
Other operating assets and liabilities               (812     )     (5,086   )
Net cash provided (used in) by operating             917           (862     )
Cash flows from investing activities:
Capital expenditures                                 (1,699   )     (3,574   )
Proceeds from sale of software assets                1,180         —        
Net cash used in investing activities                (519     )     (3,574   )
Cash flows from financing activities:
Borrowings on line of credit                         15,000         —
Repurchase of convertible senior notes               (16,919  )     —
Proceeds from issuance of common stock               219            431
Other financing activities, net                      (18      )     (14      )
Net cash provided by (used in) financing             (1,718   )     417      
Effect of exchange rate changes on cash and          (114     )     90       
cash equivalents
Net decrease in cash and cash equivalents            (1,434   )     (3,929   )
Cash and cash equivalents, beginning of period       33,182        47,770   
Cash and cash equivalents, end of period             $ 31,748      $ 43,841 

(In thousands, unaudited)

                              Three Months Ended
                                 March 31,
                                 2013                   2012
North America                    $ 26,702   39.2  %     $ 29,561   39.1  %
Asia Pacific                     26,522       38.9        26,478       35.1
Europe, the Middle East          14,954     21.9       19,448     25.8  
and Africa
Total                            $ 68,178   100.0 %     $ 75,487   100.0 %

(In thousands, unaudited)

                                 Three Months Ended
                                 March 31,
                                 2013                     2012
ATCA Platforms                   $ 34,818     51.0  %     $ 37,672     49.9  %
Software-Solutions               11,649       17.1        12,060       16.0
COM Express and Rackmount        14,627       21.5        13,150       17.4
Other Products                   7,084      10.4       12,605     16.7  
Total Revenues                   $ 68,178   100.0 %     $ 75,487   100.0 %

(In thousands, except per share amounts, unaudited)

                          Three Months Ended
                             March 31,
                             2013                     2012
GAAP revenues                $ 68,178               $ 75,487    
(a) Purchase
accounting                   —                      189         
Non-GAAP revenues            $ 68,178               $ 75,676    
GAAP gross margin            $ 19,655    28.8 %      $ 23,040    30.5 %
(a) Purchase
accounting                   —                          189
(b) Amortization of
acquired intangible          2,217                      2,442
(c) Stock-based              130                        (71      )
(d) Restructuring
and                          —                      5           
charges, net
Non-GAAP gross               $ 22,002    32.3 %      $ 25,605    33.8 %
GAAP research and            $ 11,535    16.9 %      $ 12,546    16.6 %
(c) Stock-based              (249     )              (327     )   
Non-GAAP research            $ 11,286    16.6 %      $ 12,219    16.1 %
and development
GAAP selling,
general and                  $ 11,096    16.3 %      $ 12,000    15.9 %
(c) Stock-based              (720     )              (666     )   
Non-GAAP selling,
general and                  $ 10,376    15.2 %      $ 11,334    15.0 %
GAAP loss from               $ (5,550 )   (8.1 )%     $ (4,254 )   (5.6 )%
(a) Purchase
accounting                   —                          189
(b) Amortization of
acquired intangible          3,521                      3,746
(c) Stock-based              1,099                      922
(d) Restructuring
and                          1,270                  1,449       
charges, net
Non-GAAP income from         $ 340       0.5  %      $ 2,052     2.7  %
GAAP net loss                $ (6,557 )   (9.6 )%     $ (4,815 )   (6.4 )%
(a) Purchase
accounting                   —                          189
(b) Amortization of
acquired intangible          3,521                      3,746
(c) Stock-based              1,099                      922
(d) Restructuring
and                          1,270                      1,449
charges, net
(f) Income taxes             533                    133         
Non-GAAP net income          $ (134   )   (0.2 )%     $ 1,624     2.1  %
GAAP weighted
average diluted              28,470                     26,656
Escrow shares                —                          1,344
Dilutive equity
awards included in           —                      845         
non-GAAP earnings
per share
Non-GAAP weighted
average diluted              28,470                 28,845      
shares (I)
GAAP net loss per            $ (0.23  )                 $ (0.18  )
share (diluted)
Non-GAAP adjustments         0.23                   0.24        
detailed above
Non-GAAP net income
per share (diluted)          $ —                    $ 0.06      
(I) For the three months March 31, 2012 the computation of diluted earnings
per share excludes the effects of the Company's 2013 and 2015 convertible
senior notes, as they are anti-dilutive.

(In millions, except per share amounts, unaudited)

                                    Three Months Ended
                                       June 30, 2013
                                       Low End               High End
GAAP net loss                          $   (5.3    )           $   (1.9    )
(b) Amortization of                    3.5                     3.5
acquired intangible assets
(c) Stock-based                        1.2                     1.2
(d) Restructuring and
acquisition-related                    0.3                     0.3
charges, net
(f) Income taxes                       (0.6        )           (0.6        )
Total adjustments                      4.4                    4.4         
Non-GAAP net income (loss)             $   (0.9    )           $   2.5     
GAAP weighted average                  28,600                  28,600
Non-GAAP adjustments                   —                      700         
Non-GAAP weighted average              28,600                 29,300      
shares (diluted) (I)
GAAP net loss per share                $   (0.19   )           $   (0.07   )
Non-GAAP adjustments                   0.16                   0.16        
detailed above
Non-GAAP net income (loss)             $   (0.03   )           $   0.09    
per share (diluted) (I)
(I) For the three months ended June 30, 2013 guidance for the diluted earnings
per share calculation excludes the effects of the shares underlying our
convertible senior notes as the inclusion would be anti-dilutive.


                                                  Estimates at the
                                                     midpoint of the
                                                     guidance range
                                                     Three Months Ended
                                                     June 30, 2013
GAAP                                                 30.9        %
(b) Amortization of acquired intangible assets       3.4
(c) Stock-based compensation                         0.3         
Non-GAAP                                             34.6        %

(In millions, unaudited)

                                Estimates at the
                                   midpoint of the
                                   guidance range
                                   Three Months Ended
                                   June 30, 2013
GAAP                               $      22.7    
(c) Stock-based compensation       (1.0           )
Non-GAAP                           $      21.7    

The Company excludes the following expenses, reversals, gains and losses from
its non-GAAP financial measures, when applicable:

(a) Purchase accounting adjustments: Purchase accounting adjustments
consistent of the impact to revenues and cost of sales associated with
adjusting deferred revenue and inventories of acquired companies to fair
value. For deferred revenue, as is the case with our existing business, at the
time of acquisition, the acquired business recorded deferred revenue related
to past transactions for which revenue would have been recognized by the
acquired entity in future periods as revenue recognition criteria were
satisfied. However, purchase accounting rules require us to write down a
portion of this deferred revenue to its then current fair value, which is
equivalent to the cost to complete the outstanding obligations required to
earn the deferred revenue plus a reasonable margin. Consequently, in
post-acquisition periods, we do not recognize the full amount of this deferred
revenue. When measuring the performance of our business, however, we add back
non-GAAP revenue associated with deferrals for which no future obligations
existed as well as obligations we assumed to provide maintenance or support to
customers of the acquired business that were excluded as a result of these
purchase accounting adjustments. We believe that the non-GAAP revenue
disclosures enhance investors' ability to conduct period-over-period analyses
of our results that reflect the full impact of the acquired business's results
together with the results from our pre-existing products and services.

In addition, the non-GAAP financial results exclude the impact to cost of
sales from the markup of inventories required by GAAP as part of the fair
value adjustments required under purchase accounting for business
combinations. This results from marking the acquired company's inventory to
fair value at the time of acquisition. This charge is not factored into
management's evaluation of potential acquisitions or our performance after
completion of acquisitions, because it is not related to our core operating
performance, and the frequency and amount of this type of charge can vary
significantly based on the size and timing of our acquisitions. Excluding this
data provides investors with a basis to compare the company against the
performance of other companies without this variability.

(b) Amortization of acquired intangible assets: Amortization of
acquisition-related intangible assets primarily relate to core and existing
technologies, patents, trade name and customer relationships that were
acquired with the acquisitions of Continuous Computing, Convedia, MCPD and
Pactolus. The Company excludes the amortization of acquisition-related
intangible assets because it does not reflect the Company's ongoing business
and it does not have a direct correlation to the operation of the Company's
business. In addition, in accordance with GAAP, the Company generally
recognizes expenses for internally-developed intangible assets as they are
incurred, notwithstanding the potential future benefit such assets may
provide. Unlike internally-developed intangible assets, however, and also in
accordance with GAAP, the Company generally capitalizes the cost of acquired
intangible assets and recognizes that cost as an expense over the useful lives
of the assets acquired. As a result of their GAAP treatment, there is an
inherent lack of comparability between the financial performance of
internally-developed intangible assets and acquired intangible assets.
Accordingly, the Company believes it is useful to provide, as a supplement to
its GAAP operating results, non-GAAP financial measures that exclude the
amortization of acquired intangibles in order to enhance the
period-over-period comparison of its operating results, as there is
significant variability and unpredictability across companies with respect to
this expense.

(c) Stock-based compensation: Stock-based compensation consists of expenses
recorded under GAAP, in connection with stock awards such as stock options,
restricted stock awards and restricted stock units granted under the Company's
equity incentive plans and shares issued pursuant to the Company's employee
stock purchase plan. The Company excludes stock-based compensation from
non-GAAP financial measures because it is a non-cash measurement that does not
reflect the Company's ongoing business and because the Company believes that
investors want to understand the impact on the Company of the adoption of the
applicable GAAP surrounding share based payments; the Company believes that
the provision of non-GAAP information that excludes stock-based compensation
improves the ability of investors to compare its period-over-period operating
results, as there is significant variability and unpredictability across
companies with respect to this expense.

(d) Restructuring and acquisition-related charges, net: Restructuring and
acquisition-related charges, net: Restructuring primarily relates to
activities engaged in by the Company's management to simplify and focus its
infrastructure. Restructuring and other charges are excluded from non-GAAP
financial measures because they are not considered core operating activities.
Although the Company has engaged in various restructuring activities over the
past several years, each has been a discrete event based on a unique set of
business objectives. The Company does not engage in restructuring activities
in the ordinary course of business. As such, the Company believes it is
appropriate to exclude restructuring charges from its non-GAAP financial
measures because it enhances the ability of investors to compare the Company's
period-over-period operating results.

In addition to restructuring activities, we exclude certain other
acquisition-related items including the following, when applicable: (i)
integration related charges; and (ii) acquisition-related charges.
Acquisitions result in non-recurring operating expenses, which would not
otherwise have been incurred by us in the normal course of our business
operations. Integration charges include, among other things, expenses
associated with operational consolidation, training, rebranding and
consulting. Acquisition-related charges include transaction fees and legal and
professional service expenses incurred in connection with our acquisitions. We
believe that providing non-GAAP information for acquisition-related expense
items in addition to the corresponding GAAP information allows the users of
our financial statements to better review and understand the historic and
current results of our continuing operations, and also facilitates comparisons
to less acquisitive peer companies.

(e) Impairment of goodwill: The goodwill impairment charge relates to a write
down of balances associated with previous acquisitions. The Company excludes
the goodwill impairment charge because it is unusual in nature and does not
reflect the operation of the Company's ongoing business. Additionally, its
exclusion enhances the ability of investors to compare the Company’s
period-over-period operating results.

(f) Income taxes: Non-GAAP income tax expense is equal to the Company's
projected cash tax expense. Adjustments to GAAP income tax expense are
required to eliminate the recognition of tax expense from profitable entities
where we utilize deferred tax assets to offset current period tax liabilities.
We believe that providing this non-GAAP figure is useful to our investors as
it more closely represents the true economic impact of our tax positions.


Radisys Corporation
Allen Muhich, 503-615-1616
Chief Financial Officer
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