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To: Mr. Aloha who wrote (456)	3/31/1998 10:49:00 PM
From: Greg Jung	Read Replies (1) \| Respond to of 582

Cymerians: Radisys crash seems related to semi-equips: (blurp on Motley fool): Embedded computer components and subsystems maker RadiSys Corp. (Nasdaq:RSYS -news) plunged $6 1/2 to $25 1/8 after announcing yesterday that it expects its first and second quarter results to be below market expectations, primarily due to order push-outs and a decline in orders... Excerpt from press release: ---------- Monday March 30, 4:08 pm Eastern Time Company Press Release RadiSys First and Second Quarter to be Below Expectations HILLSBORO, Ore.--(BUSINESS WIRE)--March 30, 1998--RadiSys Corp. (NASDAQ:RSYS - news) expects its first and second quarters to be below market expectations primarily due to order push-outs and reductions from a number of customers in the first quarter and the lack of anticipated orders for a new product from its largest customer in the second quarter. RadiSys has been notified of order push-outs or order reductions by several customers that are expected to result in first quarter revenues being approximately $1 million to $1.5 million below market expectations, with earnings in a range of $0.38 to $0.40 per share, which is about 20% below market expectations per share. RadiSys plans to release final revenue and earnings results for the first quarter on Thursday, April 30, 1998. RadiSys also was notified by its current largest customer, a customer to whom it expects to ship approximately $8 million of product in the first quarter, that the customer expects to need no shipments in the second quarter because of anticipated excess inventory levels due to the difficulty of predicting the early demand of this new product. This shortfall in expected revenue in the second quarter, along with some current weaknesses in order rates from other customers, is expected to cause revenue and net income levels to fall below market expectations in the second quarter of 1998. ''With this large of a revenue decline from one customer, along with some weaker-than-forecasted order rates from certain customers in the semiconductor-equipment and electronics-assembly-equipment businesses, it is not feasible that we can achieve our original plan for the first and second quarters,'' stated Glen Myers, chief executive officer of RadiSys. ''I also expect some weakness to carry into the third quarter. On the other hand, the current quarter has been a great one for us in terms of new design wins. I expect this quarter to produce a record number of major OEM design wins. As of today, the company has achieved at least 16 new major design wins in the first quarter, a record for us.'' Myers adds, ''Because we have visibility of this dip in the second quarter in advance, we will be able to manage our expenses in the next two quarters to mitigate the effect. But we will need to continue to invest in R&D spending because of the good news in new design wins. A large part of our R&D investment will be in the telecommunications equipment sector, which continues to be our highest growth rate business. For instance, at the Computer Telephony Expo a few weeks ago, we demonstrated a live high-quality-voice-over-IP system using our DSP and Pentium building blocks in the CompactPCI form factor, which was very well received. Because of our advanced technology in this area, we got a significant number of new prospects at the show.'' Outlook for 1998 The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Because of lapse in short-term orders mentioned above and because of some order weakness primarily from customers in the semiconductor and other electronic manufacturing equipment businesses resulting from global economic conditions precipitated by Asia, RadiSys expects second-quarter revenues to be in the range of $28-$30 million. Partial recovery in order rates by the third quarter is expected to increase revenues in that quarter to the $33-$37 million range. Net income for the second quarter will be impacted because of the lower revenue base, but the company expects to be solidly profitable in the second quarter. R&D expenditures will slightly increase because of the strong rate of design wins. The company believes that selling, general, and administrative expenses will remain flat for the next few quarters. --------------------------- Question: Is this order push out an acceleration of semi-equip decline beyond what is already anticipated, or not? Greg