Radisys Confirms 2013 Fourth Quarter Guidance

  Radisys Confirms 2013 Fourth Quarter Guidance

Business Wire

HILLSBORO, Ore. -- January 13, 2014

Radisys^® Corporation (NASDAQ:RSYS), a market leader providing wireless
infrastructure solutions for telecom, aerospace and defense applications,
announced that it expects fourth quarter revenue near the high end of the
guidance range and a non-GAAP per share loss that approximates the low end of
the guidance range set on November 5, 2013.

                                               
                       November 5, 2013
                       Guidance Range                        Preliminary
                       High               Low                Results
Revenue                $ 50.0             $ 44.0             High End
Non-GAAP EPS           $ (0.12)           $ (0.24)           Low End

Cash Consumption       $(7)                                  $(6)

All amounts in $m, except per share amounts.


“We are pleased that fourth quarter revenue and profitability are anticipated
to be in-line with the expectations we set back in November,” commented Brian
Bronson, Radisys President and Chief Executive Officer. “Most importantly we
delivered revenue near the top end of the range while at the same time making
significant progress on our strategic transformation and cost structure
reduction initiatives that will enable us to return to solid levels of
non-GAAP profitability in 2014 while at the same time being able to
aggressively invest in our core focus areas. The fourth quarter loss will be
towards the lower end of the range due to costs associated with our
transformation and a $2.0 million non-cash excess inventory charge resulting
from a product end of life transition. Excluding these charges, our non-GAAP
per share loss would also be towards the higher end of the range. I will be
presenting at the Needham Conference in New York City on January 14, 2014, and
this announcement allows us to preview our results and enable investor
discussions on the current state of our business. We will set a specific
earnings release and conference call date over the next month. I look forward
to sharing at that time the full results for the quarter, our go forward
guidance, and an overview of current business dynamics.”

Mr. Bronson’s presentation at the Needham Growth Conference will begin at 8:40
a.m. ET on Tuesday January 14, 2014. A live audio-only webcast of the
presentation will be available at http://wsw.com/webcast/needham64/RSYS.

Non-GAAP Financial Measure

This press release contains a non-GAAP financial measure – non-GAAP earnings
per share – the calculation of which excludes 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, (f) gain on the liquidation of a foreign
subsidiary, and (g) 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 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. Non-GAAP financial measures should
be considered in addition to results prepared in accordance with GAAP. In
addition, non-GAAP financial measures are not based on any comprehensive set
of accounting rules or principles. The Company believes 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 these measures should only be used to evaluate the
Company's results of operations in conjunction with the corresponding GAAP
financial measures.

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. 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.

Forward Looking Statements

This press release contains forward-looking statements related to the
Company’s revenues, non-GAAP net income and cash consumption for the fourth
quarter of 2013. These forward-looking statements involve risks and
uncertainties, as well as assumptions which, if they do not fully materialize
or prove incorrect, could cause our results to differ materially from those
expressed or implied by such forward-looking statements. In addition, as noted
above, the preliminary results provided in this press release are based on our
current estimates for the fourth quarter of 2013 and remain subject to change
based on our ongoing review of results, the subsequent occurrence or
identification of events prior to closing of the review and review by our
external auditors.

This press release contains forward-looking statements, including statements
about the Company's expected results for the fourth quarter of 2013. 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, including the success of transitioning
contract manufacturing partners, (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 restructuring, acquisition or divestiture
activities, (j) the Company's ability to successfully manage the transition
from 10G to 40G ATCA product technologies, and (k) 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
January 13, 2014. 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.

About Radisys

Radisys (NASDAQ:RSYS) is a market leader enabling wireless infrastructure
solutions for telecom, aerospace, and defense applications. Radisys'
market-leading ATCA, MRF (Media Resource Function), COM Express, and Network
Appliance platforms coupled with Trillium Software and services enable
customers to bring high-value products and services to market faster with
lower investment and risk.

         Radisys® and Trillium® are registered trademarks of Radisys.

                                     
RECONCILIATION OF FOURTH QUARTER 2013 GAAP TO NON-GAAP GUIDANCE

NET INCOME (LOSS) PER SHARE*

(In millions, except per share amounts, unaudited)
                                         
                                         Three Months Ended
                                         December 31, 2013
                                         Low End            High End
GAAP net loss                            $ (16.6 )                   $ (11.9 )
(b) Amortization of acquired             3.4                         3.4
intangible assets
(c) Stock-based compensation             1.1                         1.1
(d) Restructuring and                    4.0                         3.0
acquisition-related charges, net
(g) Income taxes                         1.1                        0.8     
Total adjustments                        9.6                        8.3     
Non-GAAP net income (loss)               $ (7.0  )                   $ (3.6  )
                                                                     
GAAP weighted average shares             29,105                      29,105
Non-GAAP adjustments                     —                          —       
Non-GAAP weighted average shares         29,105                     29,105  
(diluted) (I)
                                                                     
GAAP net loss per share                  $ (0.57 )                   $ (0.41 )
Non-GAAP adjustments detailed            0.33                       0.29    
above
Non-GAAP net income (loss) per           $ (0.24 )                   $ (0.12 )
share (diluted) (I)
                                                                             

        For the three months ended December 31, 2013 guidance for the diluted
(I)   earnings per share calculation excludes the effects of the shares
        underlying our convertible senior notes as the inclusion would be
        anti-dilutive.

  *The above guidance was included in the Company’s third quarter 2013 press
    release dated November 5, 2013. Although actual non-GAAP net income is not
    expected to vary from the previously provided range, actual GAAP net loss
    and the accompanying non-GAAP adjustments are expected to vary from the
    above estimates based on final closing procedures performed by the
    Company, including finalizing the Company’s tax provision and assessment
    of the recoverability of deferred tax assets.

Contact:

Radisys Corporation
Allen Muhich
Chief Financial Officer
503-615-1616
allen.muhich@radisys.com
 
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