8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 29, 2012

RADISYS CORPORATION

(Exact name of registrant as specified in its charter)

Oregon	0-26844	93-0945232
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5435 NE Dawson Creek Drive
Hillsboro, Oregon	97124
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code: (503) 615-1100

No Change

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On October 29, 2012, Radisys Corporation (the "Company" or "Radisys") entered into Amendment No. 2 (the "Amendment") to its Amended and Restated Loan and Security Agreement with Silicon Valley Bank ("SVB") dated November 1, 2011 (as amended, the "Credit Agreement"). The Amendment decreases the minimum two quarter rolling EBITDA (as defined in the Credit Agreement) required to be achieved by the Company under its minimum EBITDA financial covenant to $(3.5) million for the quarter ended December 31, 2012, $(1.0) million for the quarter ended March 31, 2013 and $3.0 million for the quarter ended June 30, 2013 and thereafter. In addition, the Amendment revises the liquidity financial covenant in the Credit Agreement to require that liquidity testing be performed on a monthly basis when obligations are outstanding under the Credit Agreement.

The Amendment also revises the calculation of the Availability Amount (as defined in the Credit Agreement) such that all permitted borrowings under the Credit Agreement are now fully subject to the borrowing base formula contained in the Credit Agreement.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is attached to this report as Exhibit 10.1 and is incorporated herein by reference.

Item 2.02 Results of Operations and Financial Condition.

The information in this Item 2.02 and the Exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or any proxy statement or report or other document we may file with the Securities Exchange Commission (“SEC”), regardless of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such filing.

On October 30, 2012, the Company issued a press release announcing its results for the fiscal quarter ended September 30, 2012. A copy of this press release is attached hereto as Exhibit 99.1.

The Company’s press release contains forward-looking statements, including statements about the Company's business strategy, financial outlook and expectations for the fourth quarter of 2012 and statements related to expense savings or reductions, operational and administrative efficiencies, revenue growth, margin improvement, financial performance and other attributes of the Company. These forward-looking statements are based on the Company's expectations and assumptions, as of the date such statements are made, regarding the Company's future operating performance and financial condition, the economy and other future events or circumstances. Actual results could differ materially from the outlook guidance and expectations in these forward-looking statements as a result of a number of risk factors, including, among others, (a) the Company's dependence on certain customers and high degree of customer concentration, (b) the Company's use of one contract manufacturer for a significant portion of the production of its products, (c) the anticipated amount and timing of revenues from design wins due to the Company's customers' product development time, cancellations or delays, (d) fluctuations in currency exchange rates, (e) the ability of the Company to successfully integrate the business and operations of Continuous Computing and higher than expected costs of integration, (f) the Company's ability to successfully manage the transition from 10G to 40G ATCA product technologies, (g) performance and customer acceptance of the Trillium line of products, (h) the combined Company's financial results and performance and (i) other factors listed in the Company's reports filed with the Securities and Exchange Commission (SEC), including those listed under “Risk Factors” in Radisys' Annual Report on Form 10-K for the year ended December 31, 2011 and in Radisys' subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by contacting the Company at 503-615-1100, from the Company's investor relations web site at http://investor.radisys.com/, or at the SEC's website at http://www.sec.gov. Although forward-looking statements help provide additional information about Radisys, investors should keep in mind that forward-looking statements are inherently less reliable than historical information. Should one or more of these risks or uncertainties materialize (or the other consequences of such a development worsen), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. The Company believes its expectations and assumptions are reasonable, but there can be no assurance that the expectations reflected herein or in the press release will be achieved. All information in the press release is as of October 30, 2012. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

To supplement its consolidated financial statements in accordance with generally accepted accounting principles (“GAAP”), the Company’s earnings release contains non-GAAP financial measures that exclude certain expenses, gains and losses, such as the effects of (a) purchase accounting adjustments, (b) amortization of acquired intangible assets, (c) stock-based compensation expense, (d) restructuring and acquisition-related charges (reversals), net, (e) impairment of goodwill, (f) gain on the liquidation of a foreign subsidiary, and (g) income taxes. The Company believes that the use of non-GAAP

financial measures provides useful information to investors to gain an overall understanding of its current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that the Company believes are not indicative of its core operating results. In addition, non-GAAP financial measures are used by management for budgeting and forecasting as well as subsequently measuring the Company’s performance, and the Company believes that it is providing investors with financial measures that most closely align to its internal measurement processes. These non-GAAP measures are considered to be reflective of the Company’s core operating results as they more closely reflect the essential revenue-generating activities of the Company and direct operating expenses (resulting in cash expenditures) needed to perform these revenue-generating activities. The Company also believes, based on feedback provided to the Company during its earnings calls’ Q&A sessions and discussions with the investment community, that the non-GAAP financial measures it provides are necessary to allow the investment community to construct their valuation models to better align its results and projections with its competitors and market sector, as there is significant variability and unpredictability across companies with respect to certain expenses, gains and losses.

The non-GAAP financial information is presented using consistent methodology from quarter-to-quarter and year-to-year. These measures should be considered in addition to results prepared in accordance with GAAP. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP financial measures.

A reconciliation of non-GAAP information to GAAP information is included in the table set forth in the press release. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and reconciliations between GAAP and non-GAAP financial measures included in this earnings release should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
10.1	Amendment No. 2, dated as of October 29, 2012, to Amended and Restated Loan and Security Agreement, dated November 1, 2011, between Radisys and Silicon Valley Bank.
99.1	Press Release, dated October 30, 2012.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		RADISYS CORPORATION
Date:	October 30, 2012	By:	/s/ Allen Muhich
			Allen Muhich
			Interim Chief Financial Officer and Vice President of Finance

EXHIBIT INDEX

Exhibit Number	Description
10.1	Amendment No. 2, dated as of October 29, 2012, to Amended and Restated Loan and Security Agreement, dated November 1, 2011, between Radisys and Silicon Valley Bank.
99.1	Press Release, dated October 30, 2012.

EX-10.1

Exhibit 10.1

AMENDMENT NO. 2 TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This AMENDMENT NO. 2 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as of October 29, 2012, by and among RADISYS CORPORATION, an Oregon corporation (“Borrower”), and SILICON VALLEY BANK (“Bank”). Capitalized terms used herein without definition shall have the same meanings given them in the Loan Agreement (as defined below).

BACKGROUND

A. Borrower and Bank have entered into that certain Amended and Restated Loan and Security Agreement dated as of November 1, 2011 (as may be amended, restated, or otherwise modified, the “Loan Agreement”), pursuant to which the Bank has extended and will make available to Borrower certain advances of money.

B. Borrower desires that Bank amend the Loan Agreement, in each case upon the terms and conditions more fully set forth herein.

C. Subject to the representations and warranties of Borrower herein and upon the terms and conditions set forth in this Amendment, Bank is willing to provide the amendment contained herein.

AGREEMENT

NOW, THEREFORE, in light of the foregoing background and intending to be legally bound, the parties hereto agree as follows:

1.AMENDMENTS TO THE LOAN AGREEMENT.

1.1 SECTION 6.2 (FINANCIAL STATEMENTS, REPORTS, CERTIFICATES). Subsection (b) of Section 6.2 to the Loan Agreement is hereby amended and restated in its entirety as follows:

“(b) Monthly, within seven (7) Business Days after the last day of each month, and no later than five (5) days prior to each Funding Date, deliver to Bank a duly completed Borrowing Base Certificate signed by a Responsible Officer, with aged listings of accounts receivable and accounts payable (by invoice date) and a Deferred Revenue report;”

1.2 SECTION 6.7 (FINANCIAL COVENANTS). Subsections (a) (Minimum EBITDA) and (c) (Liquidity) of Section 6.7 of the Loan Agreement are amended and restated in their entirety and replaced with the following:

“(a) Minimum EBITDA. For the two quarters completed at each quarter ending indicated below, EBITDA greater than the amount set forth below opposite such period:

Two Quarters Ending	Minimum EBITDA (two quarters then ending)
September 30, 2012	$	2,000,000
December 31, 2012	$	(3,500,000	)
March 31, 2013	$	(1,000,000	)
June 30, 2013 and thereafter	$	3,000,000

"

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“(c) Liquidity. At all times when there are outstanding Obligations on account of Advances or Letters of Credit, tested monthly, Liquidity of not less than 1.25:1.00.”

1.3 SECTION 13.1 (DEFINITIONS). The definition of “Availability Amount” in Section 13.1 of the Loan Agreement is amended in its entirety as follows:

“Availability Amount” is (a) the lesser of (i) the Revolving Line and (ii) the Borrowing Base, minus (b) the outstanding principal balance of any Advances.

1.4 EXHIBIT F (COMPLIANCE CERTIFICATE). Exhibit F of the Loan Agreement is amended and restated in its entirety and replaced with Exhibit F attached hereto. Exhibit A and Exhibit F are the only attachments to this Amendment.

2.BORROWER’S REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that:

(a) immediately upon giving effect to this Amendment (i) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (ii) no Event of Default has occurred and is continuing;

(b) Borrower has the corporate power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

(c) the certificate of incorporation, bylaws and other organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

(d) the execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized by all necessary corporate action on the part of Borrower;

(e) this Amendment has been duly executed and delivered by the Borrower and is the binding obligation of Borrower, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights; and

(f) as of the date hereof, it has no defenses against the obligations to pay any amounts under the Obligations. Borrower acknowledges that Bank has acted in good faith and has conducted in a commercially reasonable manner its relationships with such Borrower in connection with this Amendment and in connection with the Loan Documents.

Borrower understands and acknowledges that Bank is entering into this Amendment in reliance upon, and in partial consideration for, the above representations and warranties, and agrees that such reliance is reasonable and appropriate.

3.LIMITATION. The amendments set forth in Section 1 shall be limited precisely as written and shall not be deemed (a) to be a forbearance, waiver or modification of any other term or condition of the Loan Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which Bank may now have or may have in the future under or in connection with the Loan Agreement or any instrument or agreement referred to therein; (b) to be a consent to any future consent or modification, forbearance or waiver to any instrument or agreement the execution and delivery of which is consented to

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hereby, or to any waiver of any of the provisions thereof; or (c) to limit or impair Bank’s right to demand strict performance of all terms and covenants as of any date.

4.EFFECTIVENESS. This Amendment shall become effective upon the satisfaction of all the following conditions precedent:

4.1 Amendment. Borrower and Bank shall have duly executed and delivered this Amendment to Bank;

4.2 Reaffirmation of Guaranty. Continuous Computing shall have duly executed and delivered a Reaffirmation of Guaranty substantially in the form of Exhibit A; and

4.3 Payment of Amendment Fee. Borrower shall have paid to Bank an amendment fee in the amount of $2,500.

4.4 Payment of Bank Expenses. Borrower shall have paid all Bank Expenses (including all reasonable attorneys’ fees and reasonable expenses) incurred through the date of this Amendment.

5.COUNTERPARTS. This Amendment may be signed in any number of counterparts, and by different parties hereto in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument. All counterparts shall be deemed an original of this Amendment.

6.INTEGRATION. This Amendment and any documents executed in connection herewith or pursuant hereto contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Amendment; except that any financing statements or other agreements or instruments filed by Bank with respect to Borrower shall remain in full force and effect.

7.GOVERNING LAW; VENUE. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California.

[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above.

BORROWER:	RADISYS CORPORATION
	an Oregon Corporation
	By:	/s/ Allen Muhich
	Printed Name:	Allen Muhich
	Title:	Interim Chief Financial Officer
BANK:	SILICON VALLEY BANK
	By:	/s/ Christopher L. Snider
	Printed Name:	Christopher L. Snider
	Title:	Managing Director, SVB

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EXHIBIT A

Reaffirmation of Unconditional Secured Guaranty

This Reaffirmation of Unconditional Secured Guaranty is entered into as of October 29, 2012, by the undersigned (the “Guarantor”) in favor of SILICON VALLEY BANK (“SVB”).

WHEREAS, Guarantor executed and delivered to SVB an Unconditional Secured Guaranty dated as of August 8, 2011 (the “Guaranty”) with respect to the obligations of RadiSys Corporation, an Oregon corporation (“Borrower”), under that certain Amended and Restated Loan and Security Agreement dated as of November 1, 2011 (the “Loan Agreement”), by and between Borrower and SVB; and

WHEREAS, Borrower and SVB are amending the Loan and Security Agreement pursuant to that certain Amendment No. 2 to Amended and Restated Loan and Security Agreement dated as of the date hereof (the “Amendment”).

Now therefore, for valuable consideration, receipt of which is acknowledged, each Guarantor hereby agrees as follows:

1. Capitalized Terms. Unless otherwise defined in this Reaffirmation of Unconditional Secured Guaranty, all capitalized terms shall have the meaning given to them in the Guaranty or, if not specified there, the Amendment.

2. Reaffirmation of Guaranty. Guarantor has reviewed the Amendment. Guarantor hereby ratifies and reaffirms its obligations under the Guaranty and agrees that none of the amendments or modifications to the Loan Agreement or the consent, in each case as set forth in the Amendment, shall impair such Guarantor’s obligations under the Guaranty or SVB’s rights under the Guaranty.

3. Continuing Effect and Absence of Defenses. Guarantor acknowledges that the Guaranty is still in full force and effect and that Guarantor has no defenses, other than actual payment of the guaranteed obligations, to enforcement of the Guaranty. Guarantor waives any and all defenses to enforcement of the Guaranty that might otherwise be available as a result of the consent or the amendment of the Loan Agreement.

RADISYS INTERNATIONAL LLC, a Delaware limited liability company formerly known as CONTINUOUS COMPUTING CORPORATION, a Delaware corporation
By:	/s/ Allen Muhich
Name:	Allen Muhich
Title:	Interim Chief Financial Officer

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EXHIBIT F

FORM OF COMPLIANCE CERTIFICATE

TO:    SILICON VALLEY BANK                        Date:

FROM:

The undersigned authorized officer of RadiSys Corporation (“Borrower”) certifies that under the terms and conditions of the Amended and Restated Loan and Security Agreement dated November 1, 2011, between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance with generally GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

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Please indicate compliance status by circling Yes/No under “Complies” column.
Reporting Covenant		Required		Complies
Quarterly consolidating financial statements		Quarterly within 45 days		Yes No
Annual financial statement		FYE unaudited and audited within 90 days		Yes No
10‑Q, 10‑K and 8-K + CC		Within 5 days after filing with SEC, but, (i) in case of 10-Qs, no later than within 45 days of the last day of the first three fiscal quarter ends of each fiscal year, and (2) in case of 10-Ks, no later than within 90 days of the last day of each fiscal year		Yes No
Borrowing Base Certificate, A/R & A/P Agings + Deferred Revenue report		Monthly within 7 Business Days and within five (5) days prior to each Funding Date		Yes No
Material Litigation		Prompt		Yes* No
Annual board approved financial projections		Annually within 60 days of fiscal year end		Yes No
*If yes, attached is a summary of the Material Litigation not previously disclosed by Borrower or any of its Subsidiaries.
Financial Covenant	Required		Actual		Complies
Maintain as indicated:
Minimum Two Quarters’ EBITDA (as of the last day of each fiscal quarter, two rolling quarters)	We currently do not support nested tables...		$_______		Yes No
Maximum Capital Expenditures	Not in excess of $20,000,000 in the aggregate for the period January 1, 2011, to December 31, 2012, and not in excess of $8,000,000 in any other fiscal year. **		$_______		Yes** No
Liquidity (at all times, tested monthly)	Not less than 1.25:1.00		____: 1.00		Yes No

** Excluding Capital Expenditures financed by purchase money security interest financing or financial leases to the extent permitted by Section 7.4

The following financial covenant analys[is][es] and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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RADISYS CORPORATION	BANK USE ONLY
By:	Received by:
Name:		AUTHORIZED SIGNER
Title:
	Date:
	Verified:
		AUTHORIZED SIGNER
	Date:
	Compliance Status: Yes No

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Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

Dated:    ____________________

I.    Minimum EBITDA (Section 6.7(a))

Required: For each two-quarter period set forth below, the minimum EBITDA set forth below opposite each such period.

Two Quarters Ending	Minimum EBITDA (two quarters then ending)
September 30, 2012	$	2,000,000
December 31, 2012	$	(3,500,000	)
March 31, 2013	$	(1,000,000	)
June 30, 2013 and thereafter	$	3,000,000

Actual:

A.	Net Income	$
B.	To the extent included in the determination of Net Income
	1. Interest Expense	$
	2. Income tax expense	$
	3. Depreciation expense	$
	4. Amortization expense	$
	5. Non-cash stock based compensation expenses	$
	6. Non-cash restructuring and integration expenses related to the acquisition of Continuous Computing	$
	7. Non-cash impairment charges on goodwill as required by FAS 142 fair value testing related to intangible assets acquired through the acquisition of Continuous Computing	$
	8. The sum of lines B.1 through B.7	$
C.	EBITDA (line A plus line B.8)	$

Is line C equal to or greater than the required minimum EBITDA set forth above?
	No, not in compliance	Yes, in compliance

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II.    Maximum Capital Expenditures (Section 6.7(b))

Required: Not in excess of $20,000,000 in the aggregate for the period January 1, 2011, to December 31, 2012, and not in excess of $8,000,000 in any other fiscal year. Any Capital Expenditures financed by purchase money security interest financing or financial leases to the extent permitted by Section 7.4 shall not count towards such $20,000,000 or $8,000,000 cap, as applicable.

Actual:

A.	Aggregate amount of Capital Expenditures	$
B.	Amount of Capital Expenditures financed by purchase money security interest financing or financial leases to the extent permitted by Section 7.4 of the Loan Agreement	$
C.	Line A minus line B	$

Is line C less than or equal to the maximum amount permitted above?
	No, not in compliance	Yes, in compliance

III.    Liquidity (Section 6.7(c))

Required: At all times when there are outstanding Obligations on account of Advances or Letters of Credit, Liquidity not less than 1.25:1.00.

Actual:

A.	Borrower’s unrestricted cash, unrestricted Cash Equivalents, and unrestricted short term marketable securities held with Financial Institutions in the United States of America	$
B.	Borrower’s Foreign Subsidiaries’ unrestricted cash and unrestricted Cash Equivalents held with Financial Institutions (up to a maximum of $10,000,000)	$
C.	Eligible Accounts	$
D.	Sum of lines A through C	$
E.	Sum of all outstanding Obligations on account of Advances or Letters of Credit	$
F.	Line D divided by line E	$

Is line F greater than or equal to 1.25?
	No, not in compliance	Yes, in compliance

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EX-99.1

Exhibit 99.1

NEWS RELEASE

For more information, contact:

Allen Muhich

Interim Chief Financial Officer

503-615-1616

allen.muhich@radisys.com

RADISYS REPORTS THIRD QUARTER 2012 RESULTS

HILLSBORO, OR - October 30, 2012 - Radisys Corporation (NASDAQ: RSYS), a leading provider of embedded wireless infrastructure solutions for telecom, aerospace, defense and public safety applications, announced revenuesfor the third quarter of $63.7 million and a GAAP net loss of $35.1 million or $1.28 per share. Included in the GAAP net loss is a $29.7 million non-cash goodwill impairment charge resulting from the recent reduction in the Company's market capitalization. Third quarter non-GAAP net loss was $3.4 million or $0.12 per diluted share. Third quarter non-GAAP results exclude the impact of purchase accounting adjustments, amortization of acquired intangible assets, goodwill impairment charges, stock-based compensation, restructuring and acquisition-related charges and non-cash tax expense. A reconciliation of GAAP to non-GAAP results is located in the tables below.

Commenting on the third quarter results, Brian Bronson, Radisys' Chief Executive Officer stated, “Our third quarter revenue, while disappointing, did meet the revised expectations we set on October 1^st. The macro telecommunications spending environment remains constrained and impacted our third quarter revenue. Despite the soft demand environment, the market reaction we've seen for our products has resulted in strong design wins over the last fifteen months. Specifically, third quarter design wins are estimated to result in greater than $90 million in revenue over the next five years and included:

• Security, Femto and LTE Gateway design wins. These gateway solutions combine our unique telecom hardware and software expertise, and truly differentiate us from our traditional hardware and software only competitors.

• The market response to our next-generation ATCA based MPX-12000 continues to exceed our expectations and has resulted in a growing funnel of opportunities. Last week, the MPX-12000 was selected as the overall winner in the Best of 4G World Awards, Mobile Broadband Technology category. Also, during the quarter we shipped our first units to a Tier 1 customer for use in enabling video and voice content over next generation LTE networks and expect the pace of shipments to accelerate in the coming quarters.

• Our first deep packet inspection solution design win with the RMS-220, our new network appliance, the industry's leading performance platform with Intel Data Plane Developer Kit (DPDK).

We continue to believe our growing design win portfolio and unique combination of hardware and software capabilities position us exceptionally well for improved financial performance when the macro telecommunications demand environment improves.”

Third Quarter Financial Highlights

▪ Revenue was $63.7 million. ATCA and Software-Solutions revenues were $39.3 million, representing 62% of total revenue.

▪ GAAP gross margin was 27.7%. Non-GAAP gross margin was 31.6%. An unfavorable revenue mix from sequentially lower Software-Solutions revenue and an unfavorable mix within ATCA products temporarily reduced overall gross margin.

▪ Total GAAP Research and Development (R&D) and Selling, General and Administrative (SG&A) expenses were $23.6 million and non-GAAP R&D and SG&A expenses were $22.8 million, representing a $0.5 million sequential reduction when compared to the second quarter.

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▪ Operating expense included a $29.7 million non-cash goodwill impairment charge. The Company is considered a single reporting unit from an accounting perspective and the recent decline in its stock price triggered an impairment analysis of the Company's goodwill. As a result of this analysis, it was concluded that the fair value of the tangible and intangible assets was greater than its current market value leaving no value for an allocation to goodwill. The Company was required to write-off its entire goodwill balance.

▪ Cash used in operating activities was $0.6 million as later than normal shipments grew accounts receivable, despite the reduction in overall revenue levels.

▪ The Company repurchased $10.1 million of its convertible debt at a modest discount, leaving a balance of $16.9 million due in February of 2013 and $18.0 million due in February of 2015.

▪ Cash and cash equivalents were $31.8 million at the end of the third quarter.

Fourth Quarter 2012 Outlook

▪ Revenue: Fourth quarter revenue is expected to be between $61 million and $69 million.

▪ Gross Margin: Fourth quarter non-GAAP gross margin rate is expected to increase to approximately 33% of sales.

▪ Operating Expenses: Fourth quarter non-GAAP R&D and SG&A expenses are expected to decrease sequentially by approximately $1.0 million from third quarter levels.

▪ EPS: Fourth quarter non-GAAP net income is expected to be between a loss of $0.06 per diluted share and breakeven.

▪ Operating Cash Flow: The Company expects to generate positive operating cash flow in the fourth quarter.

Mr. Bronson continued, “The Board and I are 100% aligned on a fundamental belief that the Company needs focus. This does not mean we are going to take another year to define a new strategy or address new markets with different products. In several areas, we already have market leading products. Now is the time to focus our investments to ensure the success of those products that create the most long-term differentiation and value for our shareholders and enable a sustainable return to non-GAAP profitability and cash generation. ”

Conference Call and Webcast Information

Radisys will host a conference call on Tuesday, October 30, 2012 at 5:00 p.m. ET to discuss the third quarter 2012 results and the financial and business outlook for the fourth quarter.

To participate in the live conference call, dial (888) 333-0027 in the U.S. and Canada or (706) 634-4990 for all other countries and reference conference ID# 43428775. The live conference call will also be available via webcast on the Radisys investor relations website at http://investor.radisys.com/.

A replay of the conference call will be available two hours after the call is complete until 11:59 p.m. ET on Tuesday, November 13, 2012. To access the replay, dial (855) 859-2056 or (404) 537-3406 with conference ID# 43428775. A replay of the webcast will be available for an extended period of time on the Radisys investor relations website at http://investor.radisys.com/.

Forward-Looking Statements

This press release contains forward-looking statements, including statements about the Company's business strategy, financial outlook and expectations for the fourth quarter of 2012 and statements related to expense savings or reductions, operational and administrative efficiencies, revenue growth, margin improvement, financial performance and other attributes of the Company. These forward-looking statements are based on the Company's expectations and assumptions, as of the date such statements are made, regarding the Company's future operating performance and financial condition, the economy and other future events or circumstances. Actual results could differ materially from the outlook guidance and expectations in these forward-looking statements as a result of a number of risk factors, including, among others, (a) the Company's dependence on certain customers and high degree of customer concentration, (b) the Company's use of one contract manufacturer for a significant portion of the production of its products, (c) the anticipated amount and timing of revenues from design wins due to the

2

Company's customers' product development time, cancellations or delays, (d) fluctuations in currency exchange rates, (e) the ability of the Company to successfully integrate the business and operations of Continuous Computing and higher than expected costs of integration, (f) the Company's ability to successfully manage the transition from 10G to 40G ATCA product technologies, (g) performance and customer acceptance of the Trillium line of products, (h) the combined Company's financial results and performance and (i) other factors listed in the Company's reports filed with the Securities and Exchange Commission (SEC), including those listed under “Risk Factors” in Radisys' Annual Report on Form 10-K for the year ended December 31, 2011 and in Radisys' subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by contacting the Company at 503-615-1100, from the Company's investor relations web site at http://investor.radisys.com/, or at the SEC's website at http://www.sec.gov. Although forward-looking statements help provide additional information about Radisys, investors should keep in mind that forward-looking statements are inherently less reliable than historical information. Should one or more of these risks or uncertainties materialize (or the other consequences of such a development worsen), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. The Company believes its expectations and assumptions are reasonable, but there can be no assurance that the expectations reflected herein will be achieved. All information in this press release is as of October 30, 2012. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

Non-GAAP Financial Measures

To supplement its consolidated financial statements in accordance with generally accepted accounting principles (GAAP), the Company's earnings release contains non-GAAP financial measures that exclude certain expenses, gains and losses, such as the effects of (a) purchase accounting adjustments, (b) amortization of acquired intangible assets, (c) stock-based compensation expense, (d) restructuring and acquisition-related charges (reversals), net, (e) impairment of goodwill, (f) gain on the liquidation of a foreign subsidiary, and (g) non-cash income tax expense. The Company believes that the use of non-GAAP financial measures provides useful information to investors to gain an overall understanding of its current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that the Company believes are not indicative of its core operating results. In addition, non-GAAP financial measures are used by management for budgeting and forecasting as well as subsequently measuring the Company's performance, and the Company believes that it is providing investors with financial measures that most closely align to its internal measurement processes. These non-GAAP measures are considered to be reflective of the Company's core operating results as they more closely reflect the essential revenue-generating activities of the Company and direct operating expenses (resulting in cash expenditures) needed to perform these revenue-generating activities. The Company also believes, based on feedback provided to the Company during its earnings calls' Q&A sessions and discussions with the investment community, that the non-GAAP financial measures it provides are necessary to allow the investment community to construct their valuation models to better align its results and projections with its competitors and market sector, as there is significant variability and unpredictability across companies with respect to certain expenses, gains and losses.

The non-GAAP financial information is presented using a consistent methodology from quarter-to-quarter and year-to-year. These measures should be considered in addition to results prepared in accordance with GAAP. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP financial measures.

A reconciliation of non-GAAP information to GAAP information is included in the tables below. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and reconciliations between GAAP and non-GAAP financial measures included in this earnings release should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

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About Radisys

Radisys (NASDAQ: RSYS) is a leading provider of embedded wireless infrastructure solutions for telecom, aerospace, defense and public safety applications. Radisys' market-leading ATCA, IP Media Server and Com Express platforms coupled with world-renowned Trillium software, services and market expertise enable customers to bring high-value products and services to market faster with lower investment and risk. Radisys solutions are used in a wide variety of 3G & 4G / LTE mobile network applications including: Radio Access Networks (RAN) solutions from femtocells to picocells and macrocells, wireless core network applications, Deep Packet Inspection (DPI) and policy management; conferencing and media services including voice, video and data, as well as customized mobile network applications that support the aerospace, defense and public safety markets.

Radisys® and Trillium® are registered trademarks of Radisys.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts, unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011(a)			2012			2011(a)
Revenues	$	63,725		$	97,876		$	216,796		$	251,359
Cost of sales:
Cost of sales	43,687			66,610			142,234			173,777
Amortization of purchased technology	2,390			3,283			7,223			5,610
Gross margin	17,648			27,983			67,339			71,972
Operating expenses:
Research and development	11,845			12,955			36,104			31,562
Selling, general and administrative	11,793			15,610			33,966			37,520
Intangible assets amortization	1,303			1,234			3,911			1,618
Impairment of goodwill	29,748			—			29,748			—
Restructuring and acquisition-related charges, net	(2,717		)	5,758			(234		)	8,279
Gain on the liquidation of a foreign subsidiary	—			(2,081		)	—			(2,081		)
Loss from operations	(34,324		)	(5,493		)	(36,156		)	(4,926		)
Interest expense	(436		)	(458		)	(1,279		)	(1,410		)
Other income (expense), net	22			333			312			284
Loss before income tax expense (benefit)	(34,738		)	(5,618		)	(37,123		)	(6,052		)
Income tax expense (benefit)	373			(11,079		)	1,496			(11,174		)
Net income (loss)	$	(35,111	)	$	5,461		$	(38,619	)	$	5,122
Net income (loss) per share:
Basic	$	(1.28	)	$	0.21		$	(1.43	)	$	0.20
Diluted (I),(II)	$	(1.28	)	$	0.19		$	(1.43	)	$	0.20
Weighted average shares outstanding
Basic	27,534			26,432			26,985			25,038
Diluted (I),(II)	27,534			31,657			26,985			25,595

(I) For the three months ended September 30, 2011, the computation of diluted earnings per share includes interest costs totaling $456 related to dilutive equity shares underlying the Company's 2013 convertible senior notes. For the three and nine months ended September 30, 2012 and the nine months ended September 30, 2011, the computation of diluted earnings per share excludes the effects of the Company's 2013 and 2015 convertible senior notes, as they are anti-dilutive.

(II) For the three and nine months ended September 30, 2011, the computation of diluted earnings per share includes the effects of stock options, restricted stock units and escrow shares. For the three and nine months ended September 30, 2012, the computation of earnings per share excludes the effects of stock options, restricted stock units and escrow shares, as they are anti-dilutive.

(a) In accordance with ASC 805-10, the Company's statements of operations and cash flows for the three and nine months ended September 30, 2011 have been revised to reflect the impact of additional tax-related adjustments to our purchase accounting for Continuous Computing. These adjustments occurred during the measurement period and relate to matters existing on the date of acquisition. Additional discussion of these measurement period adjustments was provided in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.

5

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

	September 30, 2012			December 31, 2011(a)
ASSETS
Current assets:
Cash and cash equivalents	$	31,828		$	47,770
Accounts receivable, net	50,930			49,212
Inventories and inventory deposit, net	29,967			35,454
Other current assets	12,729			14,623
Total current assets	125,454			147,059
Property and equipment, net	17,871			15,366
Goodwill and intangible assets, net	73,909			114,791
Other assets, net	19,799			20,057
Total assets	$	237,033		$	297,273
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	41,408		$	37,874
Deferred income	8,928			11,602
Other accrued liabilities	18,340			27,003
Convertible senior notes, net	16,919			—
Total current liabilities	85,595			76,479
Convertible senior notes, net	18,000			45,000
Other long-term liabilities	3,912			9,061
Total liabilities	107,507			130,540
Shareholders' equity:
Common stock	302,616			301,225
Accumulated deficit	(174,831		)	(136,212		)
Accumulated other comprehensive income	1,741			1,720
Total shareholders’ equity	129,526			166,733
Total liabilities and shareholders’ equity	$	237,033		$	297,273

(a) In accordance with ASC 805-10, the Company's December 31, 2011 balance sheet has been revised to reflect the impact of additional tax-related adjustments to our purchase accounting for Continuous Computing. These adjustments occurred during the measurement period and relate to matters existing on the date of acquisition. Additional discussion of these measurement period adjustments was provided in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.

6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011(a)			2012			2011(a)
Cash flows from operating activities:
Net income (loss)	$	(35,111	)	$	5,461		$	(38,619	)	$	5,122
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization	5,628			6,321			16,800			11,535
Impairment of goodwill	29,748			—			29,748			—
Stock-based compensation expense	978			1,901			394			4,038
Other adjustments	720			(11,271		)	2,749			(10,168		)
Changes in operating assets and liabilities:
Accounts receivable	(2,542		)	3,379			(1,718		)	(2,514		)
Inventories and inventory deposit	463			(9,998		)	4,079			(12,185		)
Accounts payable	2,916			9,638			3,895			18,151
Deferred income	170			(277		)	(3,002		)	2,574
Other operating assets and liabilities	(3,596		)	(732		)	(11,697		)	(2,638		)
Net cash provided by (used in) operating activities	(626		)	4,422			2,629			13,915
Cash flows from investing activities:
Capital expenditures	(3,264		)	(2,147		)	(9,095		)	(4,289		)
Other investing activities, net	(368		)	(79,298		)	(368		)	(79,798		)
Net cash used in investing activities	(3,632		)	(81,445		)	(9,463		)	(84,087		)
Cash flows from financing activities:
Repurchases of common stock	—			(2,662		)	—			(3,920		)
Proceeds from issuance of common stock	290			410			1,100			1,324
Repurchase of convertible senior notes	(10,081		)	—			(10,081		)	—
Other financing activities, net	(98		)	(261		)	(140		)	(408		)
Net cash used in financing activities	(9,889		)	(2,513		)	(9,121		)	(3,004		)
Effect of exchange rate changes on cash and cash equivalents	123			(194		)	13			—
Net decrease in cash and cash equivalents	(14,024		)	(79,730		)	(15,942		)	(73,176		)
Cash and cash equivalents, beginning of period	45,852			135,632			47,770			129,078
Cash and cash equivalents, end of period	$	31,828		$	55,902		$	31,828		$	55,902

(a) In accordance with ASC 805-10, the Company's statements of operations and cash flows for the three and nine months ended September 30, 2011 have been revised to reflect the impact of additional tax-related adjustments to our purchase accounting for Continuous Computing. These adjustments occurred during the measurement period and relate to matters existing on the date of acquisition. Additional discussion of these measurement period adjustments was provided in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.

7

REVENUES BY GEOGRAPHY

(In thousands, unaudited)

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2012				2011				2012				2011
North America	$	22,036	34.6	%	$	30,188	30.8	%	$	77,987	36.0	%	$	73,137	29.1	%
Europe, the Middle East and Africa (“EMEA”)	15,277		24.0		21,337		21.8		47,096		21.7		63,133		25.1
Asia Pacific	26,412		41.4		46,351		47.4		91,713		42.3		115,089		45.8
Total	$	63,725	100.0	%	$	97,876	100.0	%	$	216,796	100.0	%	$	251,359	100.0	%

REVENUES BY PRODUCT GROUP

(In thousands, unaudited)

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2012				2011				2012				2011
ATCA Platforms	$	27,687	43.4	%	$	44,928	45.9	%	$	101,869	47.0	%	$	95,198	37.9	%
COM Express and Rackmount Server	13,861		21.8		16,846		17.2		37,963		17.5		43,947		17.5
Software-Solutions (I)	11,584		18.2		9,055		9.3		39,746		18.3		22,588		9.0
Other Products	10,593		16.6		27,047		27.6		37,218		17.2		89,626		35.7
Total Revenues	$	63,725	100.0	%	$	97,876	100.0	%	$	216,796	100.0	%	$	251,359	100.0	%

(I) For the three months September 30, 2012 and 2011, Software-Solutions revenues include a reduction in revenue of $0 and $1,377 for purchase accounting adjustments. For the nine months September 30, 2012 and 2011, Software-Solutions revenues include a reduction in revenue of $300 and $1,377 for purchase accounting adjustments. Refer to the description of non-GAAP financial measures for detail of this adjustment.

8

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES AND AS A PERCENT OF REVENUES

(In thousands, except per share amounts, unaudited)

	Three Months Ended										Nine Months Ended
	September 30,										September 30,
	2012					2011					2012					2011
REVENUES:
GAAP revenues	$	63,725				$	97,876				$	216,796				$	251,359
(a) Purchase accounting adjustments	—					1,377					300					1,377
Non-GAAP revenues	$	63,725				$	99,253				$	217,096				$	252,736
GROSS MARGIN:
GAAP gross margin	$	17,648		27.7	%	$	27,983		28.6	%	$	67,339		31.1	%	$	71,972		28.6	%
(a) Purchase accounting adjustments	—					1,544					300					1,544
(b) Amortization of acquired intangible assets	2,390					3,283					7,223					5,610
(c) Stock-based compensation	107					217					(98		)			572
(d) Restructuring and acquisition-related charges, net	—					212					62					212
Non-GAAP gross margin	$	20,145		31.6	%	$	33,239		33.5	%	$	74,826		34.5	%	$	79,910		31.6	%
RESEARCH AND DEVELOPMENT:
GAAP research and development	$	11,845		18.6	%	$	12,955		13.2	%	$	36,104		16.7	%	$	31,562		12.6	%
(c) Stock-based compensation	(284		)			(464		)			(315		)			(1,070		)
Non-GAAP research and development	$	11,561		18.1	%	$	12,491		12.6	%	$	35,789		16.5	%	$	30,492		12.1	%
SELLING, GENERAL AND ADMINISTRATIVE:
GAAP selling, general and administrative	$	11,793		18.5	%	$	15,610		15.9	%	$	33,966		15.7	%	$	37,520		14.9	%
(c) Stock-based compensation	(587		)			(1,220		)			(177		)			(2,396		)
Non-GAAP selling, general and administrative	$	11,206		17.6	%	$	14,390		14.5	%	$	33,789		15.6	%	$	35,124		13.9	%
INCOME FROM OPERATIONS:
GAAP income (loss) from operations	$	(34,324	)	(53.9	)%	$	(5,493	)	(5.6	)%	$	(36,156	)	(16.7	)%	$	(4,926	)	(2.0	)%
(a) Purchase accounting adjustments	—					1,544					300					1,544
(b) Amortization of acquired intangible assets	3,693					4,517					11,134					7,228
(c) Stock-based compensation	978					1,901					394					4,038
(d) Restructuring and acquisition-related charges, net	(2,717		)			5,970					(172		)			8,491
(e) Impairment of goodwill	29,748					—					29,748					—
(f) Gain on the liquidation of a foreign subsidiary	—					(2,081		)			—					(2,081		)
Non-GAAP income from operations	$	(2,622	)	(4.1	)%	$	6,358		6.4	%	$	5,248		2.4	%	$	14,294		5.7	%
NET INCOME:
GAAP net income (loss)	$	(35,111	)	(55.1	)%	$	5,461		5.6	%	$	(38,619	)	(17.8	)%	$	5,122		2.0	%
(a) Purchase accounting adjustments	—					1,544					300					1,544
(b) Amortization of acquired intangible assets	3,693					4,517					11,134					7,228
(c) Stock-based compensation	978					1,901					394					4,038
(d) Restructuring and acquisition-related charges, net	(2,717		)			5,970					(172		)			8,491
(e) Impairment of goodwill	29,748					—					29,748					—
(f) Gain on the liquidation of a foreign subsidiary	—					(2,081		)			—					(2,081		)
(g) Income taxes (II)	45					(11,300		)			690					(11,619		)
Non-GAAP net income	$	(3,364	)	(5.3	)%	$	6,012		6.1	%	$	3,475		1.6	%	$	12,723		5.0	%
GAAP weighted average diluted shares	27,534					31,657					26,985					25,595
Escrow shares	750					—					1,146					—
Dilutive equity awards included in
non-GAAP earnings per share	—					662					792					436
Convertible senior notes dilutive shares (I)	—					—					—					3,837
Non-GAAP weighted average diluted shares (I)	28,284					32,319					28,923					29,868
GAAP net income (loss) per share (diluted)	$	(1.28	)			$	0.19				$	(1.43	)			$	0.20
Non-GAAP adjustments detailed above	1.16					0.01					1.55					0.27
Non-GAAP net income per share (diluted) (I)	$	(0.12	)			$	0.20				$	0.12				$	0.47

(I) For the three and nine months ended September 30, 2012, the diluted earnings per share calculation excludes the effects of the Company's convertible senior notes, as they are anti-dilutive. For the three and nine months ended September 30, 2011, the diluted earnings per share calculation includes interest costs, net of tax benefit, totaling $456 and $1,368 related to dilutive equity shares underlying our 2013 convertible senior notes.

(II) As disclosed in the Company's second quarter 2012 earnings release during the period ended June 30, 2012 the Company modified its calculation of non-GAAP income tax expense. For comparability purposes we have revised all prior periods presented to align with our new methodology. Refer to the following table for impact of this change to prior periods.

9

RECONCILIATION OF CHANGE IN NON-GAAP TAX EXPENSE METHODOLOGY

(In thousands, except per share amounts, unaudited)

	Q1 2012
	As Reported		Adjustment			As Adjusted
Non-GAAP income tax expense (benefit)	$	269	$	(98	)	$	171
Non-GAAP net income	1,526		98			1,624
Non-GAAP net income per share (diluted)	0.05		0.01			0.06

	Q1 2011									Q2 2011							Q3 2011								Q4 2011							FY 2011
	As Reported			Adjustment			As Adjusted			As Reported		Adjustment			As Adjusted		As Reported			Adjustment			As Adjusted		As Reported		Adjustment			As Adjusted		As Reported			Adjustment			As Adjusted
Non-GAAP income tax expense (benefit)	$	(11	)	$	2		$	(9	)	$	32	$	201		$	233	$	(318	)	$	539		$	221	$	130	$	(57	)	$	73	$	(167	)	$	685		$	518
Non-GAAP net income	2,230			(2		)	2,228			4,684		(201		)	4,483		6,551			(539		)	6,012		1,362		57			1,419		14,828			(685		)	14,143
Non-GAAP net income per share (diluted)	0.09			—			0.09			0.18		(0.01		)	0.17		0.22			(0.02		)	0.20		0.05		—			0.05		0.55			(0.02		)	0.53

10

RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE

NET INCOME (LOSS) PER SHARE

(In millions, except per share amounts, unaudited)

	Three Months Ended
	December 31, 2012
	Low End			High End
GAAP net loss	$	(6.9	)	$	(5.1	)
(b) Amortization of acquired intangible assets	3.6			3.6
(c) Stock-based compensation	1.2			1.2
(d) Restructuring and acquisition-related charges, net	0.1			0.1
(g) Income taxes	0.2			0.2
Total adjustments	5.1			5.1
Non-GAAP net income	$	(1.8	)	$	0.0
GAAP weighted average shares	27,800			27,800
Non-GAAP adjustments	—			—
Non-GAAP weighted average shares (diluted) (I)	27,800			27,800
GAAP net loss per share	$	(0.25	)	$	(0.18	)
Non-GAAP adjustments detailed above	0.19			0.18
Non-GAAP net income per share (diluted) (I)	$	(0.06	)	$	0.00

(I) For the three months ended December 31, 2012 guidance for the diluted earnings per share calculation excludes the effects of the shares underlying our convertible senior notes as the inclusion would be anti-dilutive.

RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE

GROSS MARGIN

(unaudited)

	Estimates at the midpoint of the guidance range
	Three Months Ended
	December 31, 2012
GAAP	29.5	%
(b) Amortization of acquired intangible assets	3.3
(c) Stock-based compensation	0.2
Non-GAAP	33.0	%

RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE

RESEARCH AND DEVELOPMENT EXPENSE AND

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

(In millions, unaudited)

	Estimates at the midpoint of the guidance range
	Three Months Ended
	December 31, 2012
GAAP	$	22.7
(c) Stock-based compensation	(1.0		)
Non-GAAP	$	21.7

11

The Company excludes the following expenses, reversals, gains and losses from its non-GAAP financial measures, when applicable:

(a) Purchase accounting adjustments: Purchase accounting adjustments consistentof the impact to revenues and cost of sales associated with adjusting deferred revenue and inventories of acquired companies to fair value. For deferred revenue, as is the case with our existing business, at the time of acquisition, the acquired business recorded deferred revenue related to past transactions for which revenue would have been recognized by the acquired entity in future periods as revenue recognition criteria were satisfied. However, purchase accounting rules require us to write down a portion of this deferred revenue to its then current fair value, which is equivalent to the cost to complete the outstanding obligations required to earn the deferred revenue plus a reasonable margin. Consequently, in post-acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back non-GAAP revenue associated with deferrals for which no future obligations existed as well as obligations we assumed to provide maintenance or support to customers of the acquired business that wereexcluded as a result of these purchase accounting adjustments. We believe that the non-GAAP revenue disclosures enhance investors' ability to conduct period-over-period analyses of our results that reflect the full impact of the acquired business's results together with the results from our pre-existing products and services.

In addition, the non-GAAP financial results exclude the impact to cost of sales from the markup of inventories required by GAAP as part of the fair value adjustments required under purchase accounting for business combinations. This results from markingthe acquired company's inventory to fair value at the time of acquisition. This charge is not factored into management's evaluation of potential acquisitions or our performance after completion of acquisitions, because it is not related to our core operating performance, and the frequency and amount of this type of charge can vary significantly based on the size and timing of our acquisitions. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

(b) Amortization of acquired intangible assets: Amortization of acquisition-related intangible assets primarily relate to core and existing technologies, patents, trade name and customer relationships that were acquired with the acquisitions of Continuous Computing, Convedia, MCPD and Pactolus. The Company excludes the amortization of acquisition-related intangible assets because it does not reflect the Company's ongoing business and it does not have a direct correlation to the operation of the Company's business. In addition, in accordance with GAAP, the Company generally recognizes expenses for internally-developed intangible assets as they are incurred, notwithstanding the potential future benefit such assets may provide. Unlike internally-developed intangible assets, however, and also in accordance with GAAP, the Company generally capitalizes the cost of acquired intangible assets and recognizes that cost as an expense over the useful lives of the assets acquired. As a result of their GAAP treatment, there is an inherent lack of comparability between the financial performance of internally-developed intangible assets and acquired intangible assets. Accordingly, the Company believes it is useful to provide, as a supplement to its GAAP operating results, non-GAAP financial measures that exclude the amortization of acquired intangibles in order to enhance the period-over-period comparison of its operating results, as there is significant variability and unpredictability across companies with respect to this expense.

(c) Stock-based compensation: Stock-based compensation consists of expenses recorded under GAAP, in connection with stock awards such as stock options, restricted stock awards and restricted stock units granted under the Company's equity incentive plans and shares issued pursuant to the Company's employee stock purchase plan. The Company excludes stock-based compensation from non-GAAP financial measures because it is a non-cash measurement that does not reflect the Company's ongoing business and because the Company believes that investors want to understand the impact on the Company of the adoption of the applicable GAAP surrounding share based payments; the Company believes that the provision of non-GAAP information that excludes stock-based compensation improves the ability of investors to compare its period-over-period operating results, as there is significant variability and unpredictability across companies with respect to this expense.

(d) Restructuring and acquisition-related charges, net: Restructuring and acquisition-related charges, net: Restructuring primarily relates to activities engaged in by the Company's management to simplify and focus its infrastructure. Restructuring and other charges are excluded from non-GAAP financial measures because they are not considered core operating activities. Although the Company has engaged in various restructuring activities over the past several years, each has been a discrete event based on a unique set of business objectives. The Company does not engage in restructuring activities in the ordinary course of business. As such, the Company believes it is appropriate to exclude restructuring charges from its non-GAAP financial measures because it enhances the ability of investors to compare the Company's period-over-period operating results.

In addition to restructuring activities, we exclude certain other acquisition-related items including the following, when applicable: (i) integration related charges; and (ii) acquisition-related charges. Acquisitions result in non-recurring operating expenses, which would not otherwise have been incurred by us in the normal course of our business operations. Integration charges include, among other things, expenses associated with operational consolidation, training, rebranding and consulting.  Acquisition-related charges include transaction fees and legal and professional service expenses incurred in connection with our acquisitions. We believe that providing non-GAAP information for acquisition-related expense items in addition to the corresponding GAAP information allows the users of our financial statements to better review and understand the historic and current results of our continuing operations, and also facilitates comparisons to less acquisitive peer companies.

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(e) Impairment of goodwill: The goodwill impairment charge relates to a write down of balances associated with previous acquisitions. The Company excludes the goodwill impairment charge because it is unusual in nature and does not reflect the operation of the Company's ongoing business. Additionally, its exclusion enhances the ability of investors to compare the Company’s period-over-period operating results.

(f) Gain on the liquidation of a foreign subsidiary: During the third quarter of 2011, as part of an update of our tax planning strategy, we completed the liquidation of Radisys Technology Ireland Limited (“RTIL”). As a result of this liquidation we recorded a gain to reflect the realization of accumulated foreign currency translation adjustments related to RTIL. This gain represents the net unrealized foreign currency translation gains accumulated from changes in exchange rates and the related effects from the translation of assets and liabilities of RTIL. The liquidation of foreign subsidiaries occurs on an infrequent basis and management does not view the impact of this non-cash charge as indicative of the ongoing performance of the Company. As such, the Company believes it is appropriate to exclude this gain from its non-GAAP financial measures because it enhances the ability of investors to compare the Company's period-over-period operating results.

(g) Income taxes: Non-GAAP income tax expense is equal to the Company's projected cash tax expense. Adjustments to GAAP income tax expense are required to eliminate the recognition of tax expense from profitable entities where we utilize deferred tax assets to offset current period tax liabilities. We believe that providing this non-GAAP figure is useful to our investors as it more closely represents the true economic impact of our tax positions.

During the third quarter of 2011 the Company recorded an income tax benefit of $10.3 million related to the partial reversal of the valuation allowance recorded on our deferred tax assets. The reversal is the direct result of the addition of deferred tax liabilities associated with the acquisition of Continuous Computing during the third quarter of 2011.

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