Looks like another "beats the street earnings report." EPS was a little higher than I thought it would it be. In a normal market I'm sure this stock would headed higher tomorrow, however there has been so much damage done to the tech sector your guess is a good as mine. Next quarter conservative, 2001 wide open. Any after hours action?
RadiSys Delivers 42% Revenue and 92% Earnings Growth
for Third Quarter 2000
HILLSBORO, Ore., Oct 18, 2000 (BUSINESS WIRE) -- RadiSys Corporation (Nasdaq:
RSYS chart, msgs), a leading global designer and manufacturer of building blocks enabling
next-generation Internet and communications systems, today reported record revenues of $90.7
million for the quarter ended September 30, 2000, a 42% increase from revenues of $64.1 million
for the quarter ended September 30, 1999.
Net income for the quarter was $9.2 million, or $0.50 per share (diluted), which represented 92%
earnings per share growth, compared to $4.4 million or $0.26 per share (diluted) for the quarter
ended September 30, 1999. The $0.26 per share for the quarter ended September 30, 1999
excludes non-recurring items previously reported.
Net income for the current quarter includes a gain of $492 thousand, net of tax, which is the result of
a recovery on a previously written off asset received in connection with a prior divestiture. In
addition, this quarter's effective tax rate was 18.7%, which is lower than the tax rate of 29.9% for
the previous two quarters. The lower tax rate was the result of additional research and development
tax credits realized. Excluding the gain from the prior divestiture and normalizing the rate to 29.9%,
net income for the quarter was $7.5 million, or $0.41 per share.
Cash earnings per share for the current quarter, excluding the gain from the prior divestiture and
normalizing the tax rate to 29.9%, was $0.46 per share (diluted). The company defines cash
earnings per share as net income excluding goodwill and intangible amortization.
Q3 Highlights
"In addition to delivering record revenues for the quarter, and raising $120 million from the sale of
convertible notes to fuel growth and future acquisitions, we had a record quarter in bringing new
technology to our marketplace and leveraging our close relationship with Intel," said Dr. Glen Myers,
Chairman and CEO. "For instance, at the Intel Developer Forum, we demonstrated in cooperation
with Nortel Networks a RadiSys CompactPCI virtual router running Nortel's OpenIP on Intel's
IXP1200 network processor."
A significant number of communications building blocks were introduced during the quarter, such as
the Spirit-6022 DSP media processor, a PCI building block using eight Texas Instruments C6203
DSPs and with a full suite of voice coders and telephony algorithms. Two other PCI building blocks
introduced were the Artic-2107 SS7 controller and the Artic 2000 communications controller for
ATM, SONET, and voice/data convergence protocols. RadiSys also introduced the ENP-3510
CompactPCI packet processor, the first CompactPCI module on the market using Intel's IXP1200
network processor, and the CP30, a low-profile CompactPCI system chassis.
A significant number of partnering relationships were also announced in the quarter. A major one
was a development agreement with Intel for products and technology relating to Intel's IX (Internet
Exchange) architecture. RadiSys, Intel, and three other companies also created a forum for
high-availability solutions on Intel architecture. RadiSys cohosted three web seminars, two
cosponsored by Intel and the third by Intel subsidiary Trillium Digital Systems. Partnerships in Linux
and high availability were also formed with MontaVista, LynuxWorks, and GoAhead Software.
Design Wins
RadiSys achieved 16 new design wins in the quarter. RadiSys characterizes a design win as a
project estimated to produce more than $500,000 in revenue per year when in production. Seven of
the wins are significantly larger, estimated to produce more than $2 million in revenue per year once
in full production. Eight of the 16 wins were in communications-equipment applications, three in test
and measurement equipment, two in semiconductor fab equipment, and three in other areas. Design
wins ramp into production volume at varying rates; typically the ramp begins 6-12 months after the
win occurs. A variety of risks can adversely affect a design win before the start of production, such
as schedule delays, cancellations and changes in customer markets.
Executive Changes
RadiSys' Board of Directors announced two executive promotions. Ron Dilbeck has been appointed
to the newly created position of Chief Operating Officer. Previously Dilbeck had been Vice
President and General Manager of the Computer Platforms Division. The product divisions, along
with the manufacturing and sales organizations will report to Mr. Dilbeck.
Arif Kareem, who held the position of Vice President and General Manager of the
Telecommunications Division, will retain his current responsibilities but with the title of Senior Vice
President.
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 for the fourth quarter and 2001, Myers said, "We have seen increased
uncertainty and conservatism in our customers' forecasts and order rates this month. This has
primarily been in certain types of legacy telecom equipment, such as enterprise equipment, voice mail
systems, and products associated with circuit-switched networks. As a result, we are revising some
of our near-term guidance."
"Specifically," he added, "our outlook for the fourth quarter is that revenues and earnings will be
approximately equal to those of the third quarter. However, this should still equate to a 20-25%
revenue growth over the fourth quarter a year ago. For 2001, our outlook is very positive. We see
earlier design wins in new network architectures such as voice over packet networks, optical
networks, SS7, unified messaging, GPRS wireless, and 3G wireless as fueling substantial growth in
2001. We project core growth in 2001, without the effects of any future acquisitions, to be 25% to
35% in revenue and earnings. We couldn't feel more strongly that our strategy of creating building
blocks that enable next-generation Internet and communications systems is right on target to
maximize value for both our customers and our shareholders."
More details about financial guidance will be given in today's conference call, scheduled for 5 PM
Eastern Time. The public is invited to participate in the conference call by either calling
415/228-4637, 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 at 402/998-0932 or via audio webcast at
www.radisys.com.
RadiSys (Nasdaq: RSYS chart, msgs) designs and manufactures building blocks for next-generation
Internet, communications, industrial automation, medical equipment, and transaction terminal
applications. As a leading independent provider to OEMs, RadiSys delivers a time-to-market
advantage in a tight "virtual division" relationship with its customers. The building blocks include
Intel-based embedded computers, DSP modules and algorithms, network interfaces and protocols,
systems platforms, embedded software, systems engineering and integration services. RadiSys' highly
differentiated position in the market is a result of its intense focus on Intel-based technology, having
the broadest array of building blocks, and having a "perfect fit" product development strategy using
its intellectual property to design customer subsystems.
RadiSys is a registered trademark. All other products are trademarks or registered trademarks of
their respective companies.
Except for the historical information contained herein, the matters discussed in this press release,
including the statements regarding future development and business activities, expectations of future
orders and estimated revenues and earnings from design wins, are forward-looking statements that
involve risks and uncertainties. The following are among the factors that could cause actual results to
differ materially: dependence on the relationship with Intel Corporation and its products; lower than
expected or delayed sales in the communications market; lower than expected design wins with key
OEMs; failure of leading OEMs to incorporate RadiSys' solutions in successful products; deliveries
of products containing errors, defects and bugs; dependence on a limited number of suppliers or, in
some cases, one supplier for components and equipment used to manufacture products; difficulties in
integrating acquired businesses and assets; competition in the embedded computer market, which
may lead to pricing pressures; political, economic and regulatory risks associated with international
operations; technological developments; the inability to protect RadiSys' intellectual property or
successfully to defend against infringement claims by others; availability of qualified personnel;
business conditions in the general economy and in the markets RadiSys serves, particularly the
communications market; technological difficulties and resource constraints encountered in developing
new products; and difficulty or inability to meet obligations to repay indebtedness. The
forward-looking statements should be considered in light of these factors.
For more information, contact RadiSys at investor.relations@radisys.com or call the RadiSys
Investor Line at 503/615-RSYS.
For more information, press only: Eric Stebel, Public Relations Manager, RadiSys, 713/541-8200
To receive these releases via email, visit our web page at www.radisys.com and subscribe to our
electronic mailing list.
RadiSys Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
(unaudited) (unaudited)
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
--------- --------- --------- ---------
Revenues $ 90,719 $ 64,096 $ 258,183 $ 178,145
Cost of goods sold 59,338 40,724 167,409 113,023
--------- --------- --------- ---------
Gross profit 31,381 23,372 90,774 65,122
Research and
development 9,542 7,438 27,828 21,973
Selling, general
and administrative 9,716 9,385 28,965 26,991
Goodwill and
intangibles
amortization 1,557 722 5,008 1,733
Combination costs -- 5,971 -- 5,971
--------- --------- --------- ---------
Income from
operations 10,566 (144) 28,973 8,454
Interest
income, net 403 229 606 936
Other income, net 333 2,007 939 2,007
--------- --------- --------- ---------
Income before
income tax
provision 11,302 2,092 30,518 11,397
Income tax
provision /
(benefit) 2,115 1,147 7,854 (1,807)
--------- --------- --------- ---------
Net income $ 9,187 $ 945 $ 22,664 $ 13,204
========= ========= ========= =========
Net income
per share
(basic) $ 0.54 $ 0.06 $ 1.34 $ 0.82
========= ========= ========= =========
Net income
per share
(diluted) $ 0.50 $ 0.06 $ 1.24 $ 0.79
========= ========= ========= =========
Weighted Average
Shares (basic) 17,144 16,212 16,907 16,082
========= ========= ========= =========
Weighted Average
Shares (diluted) 18,475 17,170 18,291 16,756
========= ========= ========= =========
RadiSys Corporation
Consolidated Balance Sheet
(in thousands)
ASSETS
Sept. 30, Dec. 31,
2000 1999
(unaudited)
-------- --------
Current assets
Cash and cash equivalents $ 86,147 $ 15,708
Short term investments 66,481 --
Accounts receivable, net 67,711 58,619
Inventories, net 50,730 41,374
Other current assets 2,678 1,747
Deferred income taxes 4,873 4,723
-------- --------
Total current assets 278,620 122,171
Equipment, net 25,653 21,211
Goodwill and intangible
assets, net 31,525 34,177
Other assets 14,144 10,004
Total assets $349,942 $187,563
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 33,108 $ 19,878
Short term borrowings -- 13,931
Income taxes payable 5,999 3,527
Accrued wages and bonuses 8,276 6,706
Other accrued liabilities 9,187 9,266
-------- --------
Total current liabilities 56,570 53,308
-------- --------
Convertible subordinated notes 116,475 --
-------- --------
Total liabilities 173,045 53,308
-------- --------
Shareholders' equity
Common stock, 100,000 shares
authorized, 17,293 and
16,489 shares issued and
outstanding 160,510 141,030
Accumulated other comprehensive
income/(loss):
Cumulative translation
adjustment (1,558) (1,546)
Unrealized gain/(loss) on
securities available for
sale 161 (349)
Accumulated earnings/(deficit) 17,784 (4,880)
-------- --------
Total shareholder's equity 176,897 134,255
-------- --------
Total liabilities and
shareholders' equity 349,942 187,563
======== ========
Contact:
RadiSys Corporation
Brian Bronson, 503/615-1281 (Investor Relations)
brian.bronson@radisys.com
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