-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IEwHmTL/Bdl6Y6wcu96cmWX/s3g+FmSxMgnmc6g0PCn3npSbMwNtnn3JlTvQPJMX /t2iuIYbAthL7JkT21x08A== 0001169232-05-005267.txt : 20051109 0001169232-05-005267.hdr.sgml : 20051109 20051109114412 ACCESSION NUMBER: 0001169232-05-005267 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20051109 DATE AS OF CHANGE: 20051109 GROUP MEMBERS: THE D3 CHILDREN'S FUND, L.P. GROUP MEMBERS: THE D3 FAMILY BULLDOG FUND, L.P. GROUP MEMBERS: THE D3 FAMILY FUND, L.P. GROUP MEMBERS: THE D3 FAMILY RETIREMENT FUND, L.P. GROUP MEMBERS: THE D3 OFFSHORE FUND, L.P. FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NIERENBERG DAVID CENTRAL INDEX KEY: 0001040899 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 19605 N E 8TH STREET CITY: CAMAS STATE: WA ZIP: 98607 BUSINESS PHONE: 3606048600 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RADISYS CORP CENTRAL INDEX KEY: 0000873044 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 930945232 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-45775 FILM NUMBER: 051188511 BUSINESS ADDRESS: STREET 1: 5445 NE DAWSON CREEK DR CITY: HILLSBORO STATE: OR ZIP: 97124 BUSINESS PHONE: 5036461800 MAIL ADDRESS: STREET 1: 5445 NE DAWSON CREEK DRIVE CITY: HILLSBORO STATE: OR ZIP: 97124 SC 13D/A 1 d65807_sc13da.txt AMENDMENT NO 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Act of 1934 (Amendment No. 1) RADISYS CORPORATION (RSYS) ------------------------------ (Name of Issuer) Common Stock ------------------------------ (Title of Class of Securities) 750459109 ------------------------------ (CUSIP Number) David Nierenberg The D3 Family Funds 19605 NE 8th Street Camas, WA 98607 360-604-8600 ---------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 28, 2005 ------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: [ ] (1) Name of Reporting Person: S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON. The D3 Family Fund, L.P. (David Nierenberg is president of the General Partner, which is Nierenberg Investment Management Company.) - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) |X| (b) - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds: WC - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization: Washington - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power: 964,750 common shares (4.7%) Shares Beneficially (8) Shared Voting Power: 0 Owned by Each (9) Sole Dispositive Power: 964,750 Reporting Person With (10) Shared Dispositive Power: 0 - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,857,291 shares (9.0%) - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11): 9.0% - -------------------------------------------------------------------------------- (14) Type of Reporting Person: PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 2 (1) Name of Reporting Person: S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON The D3 Family Retirement Fund, L.P. (David Nierenberg is president of the General Partner, which is Nierenberg Investment Management Company.) - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) |X| (b) - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds: WC - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization: Washington - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power: 173,250 common shares (0.8%) Shares Beneficially (8) Shared Voting Power: 0 Owned by Each (9) Sole Dispositive Power: 173,250 Reporting Person With (10) Shared Dispositive Power: 0 - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,857,291 shares (9.0%) - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11): 9.0% - -------------------------------------------------------------------------------- (14) Type of Reporting Person: PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 3 (1) Name of Reporting Person: S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON The D3 Children's Fund, L.P. (David Nierenberg is president of the General Partner, which is Nierenberg Investment Management Company.) - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) |X| (b) - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds: WC - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization: Washington - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power: 75,800 common shares (0.4%) Shares Beneficially (8) Shared Voting Power: 0 Owned by Each (9) Sole Dispositive Power: 75,800 Reporting Person With (10) Shared Dispositive Power: 0 - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,857,291 shares (9.0%) - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11): 9.0% - -------------------------------------------------------------------------------- (14) Type of Reporting Person: PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 4 (1) Name of Reporting Person: S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON The D3 Offshore Fund, L.P. (David Nierenberg is president of the General Partner, which is Nierenberg Investment Management Company.) - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) |X| (b) - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds: WC - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization: Bahamas - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power: 455,391 common shares (2.2%) Shares Beneficially (8) Shared Voting Power: 0 Owned by Each (9) Sole Dispositive Power: 455,391 Reporting Person With (10) Shared Dispositive Power: 0 - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,857,291 shares (9.0%) - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11): 9.0% - -------------------------------------------------------------------------------- (14) Type of Reporting Person: PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 5 (1) Name of Reporting Person: The D3 Family Bulldog Fund, L.P. ((David Nierenberg is president of the General Partner, which is Nierenberg Investment Management Company.) - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) |X| (b) - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds: WC - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization: Washington - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power: 188,100 common shares (0.9%) Shares Beneficially (8) Shared Voting Power: 0 Owned by Each (9) Sole Dispositive Power: 188,100 Reporting Person With (10) Shared Dispositive Power: 0 - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,857,291 shares (9.0%) - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11): 9.0% - -------------------------------------------------------------------------------- (14) Type of Reporting Person: PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 6 Item 1. Security and Issuer. Common stock in RADISYS CORPORATION (RSYS) 5445 N.E. Dawson Creek Drive, Hillsboro, OR 97124. Item 2. Identity and Background. The D3 Family Funds are Washington State limited partnerships, whose principal business is investing in the equities of public micro-cap issuers. The D3 Family Funds consist of: D3 Family Fund, L.P, D3 Family Retirement Fund, L.P, D3 Children's Fund, L.P, D3 Offshore Fund, L.P., D3 Family Bulldog Fund, L.P. Located at 19605 N.E. 8th St., Camas, Washington 98607. No convictions or administrative proceedings as described in 2 (d) and (e). Item 3. Source and Amount of Funds or Other Consideration Source of funds is money invested in the partnership by their partners. Item 4. Purpose of Transaction After RSYS announced third quarter earnings on October 27, 2005, we jumped on the opportunity to increase our ownership of this fine company at unusually attractive prices. On October 28, we increased our ownership approximately 50%. Now we own over 1,857,000 shares, or 9.0% of the company, which probably makes us the company's second largest shareholder. RSYS is a dramatically undervalued growth company which possesses a fortress balance sheet, an impressive board of directors, a strong management team, and a business model which generates a stunning amount of positive cash flow. The stock market has trouble valuing this company. Because RSYS is a micro-cap, not many analysts trouble to understand it. Moreover, RSYS' business, on the surface, is not easy for some people to understand. What "advanced embedded computing" means is not intuitively obvious. There are few, if any, pure play public companies with which to compare RSYS. RSYS' revenues are highly concentrated, with its top five customers generating 72% of sales in the most recent quarter. This means that quarterly revenues are inherently lumpy. Wall Street's obsession with linear short term results causes it to undervalue dramatically the fundamental shareholder value which is being created at RSYS. Those who look out three to five years, like venture capitalists do, see value in a very different way than those who only look out three months. 7 We bought our latest block of RSYS shares on October 28, when the stock closed at $15.87. Each share was backed by $9.00 in cash (assuming conversion of the convertible debt). Moreover, the company will generate nearly $1 per share in free cash flow from operations in the second half of calendar 2005. RSYS' share price, net of cash, on that day, was $6.87, which is only about 8.5 times projected 2006 earnings. This is an absurdly low forward P-E for a company which probably will grow earnings at about a 20% annual rate over the next five years. The company's net forward P-E relative to its long term growth rate was only 0.4, in an industry where companies' PE/Growth rate usually exceeds 1.0. RSYS' total enterprise value relative to forward revenues was only 0.6. RSYS' total enterprise value was less than four times annualized second half 2005 free cash flow. The board's decision to quintuple the size of the repurchase program clearly was the right thing to do under these circumstances. RSYS is not only attractive in terms of its extreme under-valuation. The company has an excellent board of directors, a strong management team, a well focused business strategy, stable long term shareholders, and the benefit of powerful market growth drivers. RSYS' customers need the company's expertise to reduce their product and R&D costs and to speed their new products to market. Moreover, working with RSYS enables its customers to focus their engineering where they truly possess domain expertise so that they can provide maximum benefit to their own customers. Chip and chip set suppliers like Intel are driving the move from proprietary to open standards, particularly in telecommunications and healthcare, and are investing heavily in the development of new industry standards which firms like RSYS can exploit. We are happy to wait while these events unfold, knowing that the company's repurchases will further increase our ownership percentage. Our only request of RSYS is this: now that the board has approved an expanded $25 million share repurchase program, use it to get the job done! The company did not repurchase shares under its previously announced $5M repurchase program. We do not wish to see the company risk impairing its credibility with the financial community by failing to make repurchases this time. Pay the price set by the market to repurchase these shares. The repurchase program is well justified by all the circumstances cited above. Carpe diem! Item 5. Interest in Securities of the Issuer. (a,b) D3 Family Funds own and have sole voting and dispositive power over 1,857,291, 9.0% common shares of RSYS. 8 (c)
Transaction Shares Fund Date Bought Price ---- ----------- -------- ----- D3 Family Fund, L.P. 10/27/2005 55,000 17.29 D3 Family Fund, L.P. 10/28/2005 325,000 16.04 D3 Family Retirement Fund, L.P. 9/21/2005 3,000 17.80 D3 Children's Fund, L.P. 10/28/2005 32,300 16.04 D3 Offshore Fund, L.P. 9/21/2005 3,287 17.80 D3 Offshore Fund, L.P. 10/27/2005 26,000 17.29 D3 Offshore Fund, L.P. 10/28/2005 141,000 16.04 D3 Offshore Fund, L.P. 11/1/2005 1,204 15.90 D3 Family Bulldog Fund, L.P. 9/22/2005 200 17.80 D3 Family Bulldog Fund, L.P. 10/27/2005 30,000 17.29 D3 Family Bulldog Fund, L.P. 10/28/2005 69,000 16.04
(d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. N/A Item 7. Material to be Filed as Exhibits N/A SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, each of the undersigned certifies that the information set forth in the Statement is true, complete and correct. November 10, 2005 /s/ DAVID NIERENBERG - ----------------- -------------------------------------- David Nierenberg President Nierenberg Investment Management Company, Inc., the General Partner of The D3 Family Funds 9 -----END PRIVACY-ENHANCED MESSAGE-----