RadiSys Refines Q2 Expectations, Specifies Cost-saving Measures, and Announces CFO
Transition
HILLSBORO, Ore., Jun 27, 2001 (BUSINESS WIRE) -- RadiSys Corporation (Nasdaq:
RSYS chart, msgs) reiterated today that revenue for its seconD quarter ending June 30 will exceed that
of its first quarter; Q2 revenue is expected to be approximately $62 million, compared to $56.2 million in
Q1.
Second-quarter pro forma net loss, excluding anticipated one-time charges, is expected to improve over
first-quarter levels, although not as close to break-even as the Company previously anticipated. The Q2
pro forma net loss is expected to be in the vicinity of 8 to 10 cents per share, an improvement over the
Q1 pro forma loss of 13 cents per share.
"While we are seeing the same weaknesses in our markets that everyone else is seeing, we have some
solace in seeing that revenue is not shrinking, and we continue to be proactive in reducing our
break-even point," stated Dr. Glen Myers, Chairman and CEO. "Our efforts to reduce our break-even
point will require that we take a restructuring charge in the second quarter. The charge this quarter is a
result of a thorough review of the company's infrastructure with the goal of achieving profitability in this
down market. This augments the charge the company executed in the first quarter to consolidate our
internal manufacturing operations."
The Company is eliminating approximately 45 positions, including some senior and mid-level
management roles. Executive salaries are being reduced by 10% and salaries of mid-level management
are being reduced by 7%. Because the Company continues to have excess manufacturing capacity, the
Hillsboro, Oregon manufacturing plant will be shut down for the first few weeks in July except for certain
shipping and prototyping activities; production employees will have the option of using vacation time or
taking time off without pay.
In addition to the above, RadiSys is closing its digital signal processing design center in Newton,
Massachusetts. The Company's DSP development is currently split between this design center and one
in Boca Raton, Florida, so the change is one of consolidating the function into the Boca Raton design
center. The Newton DSP design center currently employs 20 people, almost all of them engineers.
Some of the people will be offered relocation to Boca Raton.
The Company anticipates taking one-time charges in its second quarter. In addition to a restructuring
charge for the actions above, the charges will include some write-down of excess and obsolete inventory.
RadiSys also announced that Stephen Loughlin, Chief Financial Officer, has resigned to pursue other
interests. CEO Glen Myers will take on the role of acting CFO. An executive search for a new CFO is
underway.
"Steve was instrumental in building a strong financial team and creating good internal processes for
financial control," said Glen Myers. "We wish him well in whatever he chooses to do next."
All further details of the current quarter, one-time charges, and guidance moving forward will be
addressed at the Company's press release and conference call currently scheduled for after the market
close on July 18, 2001.
RadiSys is a leading provider of building blocks enabling next-generation Internet and communications
systems. The building blocks provided to telecommunications equipment manufacturers include
Intel-architecture embedded computers, network processors, DSP modules and algorithms, network
interfaces and protocols, high-availability switch-fabric system platforms, and SS7/signaling blades and
gateways. RadiSys' highly differentiated position in the market is a result of its focus on Intel-based
technology, its broad array of building-block technology, its tight "virtual division" relationships with its
customers, and its use of intellectual property to generate "perfect fit" solutions for its customers.
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 expectations of future operating performance, future development and
business activities, expectations of future orders, future revenues and earnings, 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: general business and
economic conditions in the markets RadiSys serves, particularly the communications market; changes
in customer order patterns or inventory levels; dependence on the relationship with Intel Corporation and
its products; lower than expected or delayed sales by our customers in the communications market;
lower than expected design wins with key OEMs; failure of leading OEMs to incorporate RadiSys'
solutions in successful products; schedule delays or cancellations in design wins; execution of the
development or production ramp for design wins; inability to successfully integrate acquired businesses
and assets, 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; 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; 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.
To obtain copies of the press release and other Company material please visit the web-site at
www.radisys.com or contact investor relations at investor.relations@radisys.com or call the RadiSys
Investor Line at 503/615-RSYS.
To receive these releases via email, visit our web page at www.radisys.com and subscribe to our
electronic mailing list.
Contact:
RadiSys Corporation
Investor Relations
Brian Bronson, 503/615-1281
brian.bronson@radisys.com
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