4/18/2003 - 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.
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.
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.
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 email@example.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.
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