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): April 23, 2015

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 April 23, 2015, Radisys Corporation (the “Company” or “Radisys”) entered into Amendment No. 2 (the "Second Amendment”) to the Third Amended and Restated Loan and Security Agreement between the Company and Silicon Valley Bank dated March 14, 2014. The Second Amendment increases the letter of credit sublimit to the lesser of $5,000,000 or the net borrowing availability. Previously, the letter of credit sublimit was the lesser of $2,000,000 or the net borrowing availability.

The foregoing description of the Second Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Second 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 Exhibit 99.1 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 April 28, 2015, the Company issued a press release announcing its results for the fiscal quarter ended March 31, 2015. A copy of this press release is attached hereto as Exhibit 99.1.

This press release contains forward-looking statements, including statements about the Company's business strategy, changes in reporting segments, financial outlook and expectations for 2015 and for the first quarter of 2015 and statements related to revenue and gross margins from our respective segments and product lines, investments in future growth, expense savings or reductions, increased profitability, product line focus, 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, customer requirements, outcome of product trials, 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) customer implementation of traffic management solutions, (b) the outcome of product trials, (c) the market success of customers’ products and solutions, (d) the development and transition of new products and solutions, (e) the enhancement of existing products and solutions to meet customer needs and respond to emerging technological trends, (f) the Company's dependence on certain customers and high degree of customer concentration, (g) the Company's use of one contract manufacturer for a significant portion of the production of its products, including the success of transitioning contract manufacturing partners, (h) the anticipated amount and timing of revenues from design wins due to the Company's customers' product development time, cancellations or delays, (i) matters affecting the software and embedded systems industry, including changes in industry standards, changes in customer requirements and new product introductions, (j) actions by regulatory authorities or other third parties, (k) cash generation, (l) changes in tariff and trade policies and other risks associated with foreign operations, (m) fluctuations in currency exchange rates, (n) the ability of the Company to successfully complete any restructuring, acquisition or divestiture activities, (o) risks relating to fluctuations in the Company’s operating results, the uncertainty of revenues and profitability and the potential need to raise additional funding and (p) 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, 2014, 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 April 28, 2015. 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) amortization of acquired intangible assets, (b) stock-based compensation expense, (c) restructuring and other charges (reversals), net, (d) non-cash income tax expense, (e) gain on life insurance asset and (f) gain on sale of land held for

sale. 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.

Item 9.01 Financial Statements and Exhibit.

(d) Exhibit

Exhibit Number	Description
10.1	Amendment No. 2 to the Third Amended and Restated Loan and Security Agreement, dated April 23, 2015, between Radisys Corporation and Silicon Valley Bank
99.1	First Quarter 2015 Earnings Release, dated April 28, 2015

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 thereunto duly authorized.

		RADISYS CORPORATION
Date:	April 28, 2015	By:	/s/ Jonathan Wilson
			Jonathan Wilson
			Chief Financial Officer and Vice President of Finance (Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit Number	Description
10.1	Amendment No. 2 to the Third Amended and Restated Loan and Security Agreement, dated April 23, 2015, between Radisys Corporation and Silicon Valley Bank
99.1	Press Release, dated April 28, 2015.

EX-10.1

Exhibit 10.1

AMENDMENT NO. 2

TO

THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This AMENDMENT NO. 2 TO THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as of April 23, 2015, 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 Third Amended and Restated Loan and Security Agreement dated as of March 14, 2014 (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, 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. AMENDMENT TO THE LOAN AGREEMENT.

1.1    SECTION 2.2.1 (LETTERS OF CREDIT SUBLIMIT). Subsection (a) of Section 2.2.1 of the Loan Agreement is hereby amended and restated in its entirety and replaced with the following:

“(a)As part of the Revolving Line, Bank shall issue or have issued Letters of Credit for Borrower’s account. The face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit) and any Letter of Credit Reserve may not exceed the lesser of Five Million Dollars ($5,000,000) or the Net Borrowing Availability. The amount otherwise available for Advances under the Revolving Line shall at all times be reduced by the face amount of issued and outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit) and any Letter of Credit Reserve. If, on the Revolving Line Maturity Date, there are any outstanding Letters of Credit, then on such date Borrower or the applicable Loan Party shall provide to Bank cash collateral in an amount equal to 105% of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to said Letters of Credit. All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s standard Application and Letter of Credit Agreement (the “Letter of Credit Application”). Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request and pay to Bank customary fees and expenses for the issuance or renewal of Letters of Credit (including, without limitation, a Letter of Credit Fee of one and half percent (1.50%) per annum of the face amount of each Letter of Credit issued, upon the issuance, each anniversary of the issuance, and the renewal of such Letter of Credit).”

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 date of this Amendment 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 amendment 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 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

5. following conditions precedent:

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

4.2    Reaffirmation of Guaranty. Radisys International LLC shall have duly executed

and delivered a Reaffirmation of Guaranty substantially in the form of Exhibit A attached hereto; and

4.3     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. This Amendment is a Loan Document.

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]

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

BORROWER:
RADISYS CORPORATION
By:	/s/ Jon Wilson
Printed Name:	Jon Wilson
Title:	Chief Financial Officer

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

BANK:
SILICON VALLEY BANK
By:	/s/ Jayson Davis
Printed Name:	Jayson Davis
Title:	Vice President

EXHIBIT A

Reaffirmation of Unconditional Secured Guaranty

This Reaffirmation of Unconditional Secured Guaranty is entered into as of April 23, 2015, 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 Loan and Security Agreement dated as of August 7, 2008, by and between Borrower and SVB;

WHEREAS, Guarantor executed and delivered to SVB that certain Reaffirmation of Unconditional Secured Guaranty dated as of July 29, 2013 with respect to the obligations of Borrower, under that certain Second Amended and Restated Loan and Security Agreement dated as of July 29, 2013 , by and between Borrower and SVB.

WHEREAS, Guarantor executed and delivered to SVB that certain Reaffirmation of Unconditional Secured Guaranty dated as of March 14, 2014 with respect to the obligations of Borrower, under that certain Third Amended and Restated Loan and Security Agreement dated March 14, 2014 (the “Third A&R Loan Agreement”),by and between Borrower and SVB;

WHEREAS, Guarantor executed and delivered to SVB that certain Reaffirmation of Unconditional Secured Guaranty dated as of May 30, 2014 with respect to the obligations of Borrower under that certain Amendment No. 1 to Third Amended and Restated Loan and Security Agreement dated as of May 30, 2014; and

WHEREAS, Borrower and SVB are amending the Third A&R Loan Agreement pursuant to that certain Amendment No. 2 to Third 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 Third A&R Loan Agreement 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 amendment of the Third A&R Loan Agreement.

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

EX-99.1

Exhibit 99.1

    NEWS RELEASE

For more information, contact:

Jon Wilson

Chief Financial Officer

503-615-1685

jon.wilson@radisys.com

RADISYS REPORTS FIRST QUARTER 2015 RESULTS

HILLSBORO, OR - April 28, 2015 - Radisys Corporation (NASDAQ: RSYS), the services acceleration company, announced first quarter 2015 revenues of $48.7 million and a GAAP net loss of $7.1 million or $.19 per diluted share. First quarter non-GAAP net income was $1.2 million or $.03 per diluted share.

First Quarter Financial Highlights

• Non-GAAP EPS of $.03 vs. guidance of $.01, an increase of $.17 year-on-year;

• Software-Systems revenue of $9.7 million, an increase of over 20% year-on-year;

• Embedded Products operating income of $4.0 million, an increase of $2.0 million sequentially and nearly $5 million year-on-year;

• Repaid the Company’s $18 million convertible note; and

• Cash flow from operations of $3.6 million, inclusive of $1.5 million cash paid for employee restructuring, and representing the highest level of cash flow from operations since the second quarter of 2013.

“As I mentioned in our pre-release two weeks ago, we are off to a good start in 2015 and these results provide further confidence in our ability to deliver on our outlook for the full year,” said Brian Bronson, Radisys President and CEO. “More specifically, we continue to see the funnel of opportunities building within our Software-Systems product lines, our Embedded Products business is off to a strong start against the 2015 cash flow objectives we set forth and our legacy revenue appears to be stable.”

Software-Systems Business Highlights

• MediaEngine

• The Company is supporting 30+ MediaEngine VoLTE trials, including two new trials through channel partners in the first quarter.

• Announced new channel partner relationships with Agnity and Oracle, in addition to the January 2015 announcement of our exclusive partnership with Nokia in their OpenTAS program, further enhancing the Company’s portfolio of channel partner relationships associated with VoLTE, WebRTC and other real-time services.

• FlowEngine

• Received acceptance for the initial FlowEngine systems shipped in the fourth quarter of 2014 from a large North American carrier and recently received a second order for additional lab systems from this carrier.

• Radisys’ FlowEngine TDE-1000 was recognized by INTERNET TELEPHONY with the NFV Pioneer Award. The award recognizes demonstrated innovation and noteworthy developments towards improving network function virtualization, serving as further validation of our product strategy.

Second Quarter Outlook

• Second quarter revenue is expected between $42 million and $46 million, with expected double digit sequential Software-Systems revenue growth.

• Non-GAAP gross margin in the second quarter is expected between 32% and 34% of sales and non-GAAP R&D and SG&A expenses are expected to approximate $13.5 million.

• Second quarter non-GAAP earnings are expected to range from breakeven to a profit of $.06 per share. GAAP net loss is expected to range from $(.16) to $(.07).

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• Cash is expected to increase by approximately $2 million.

Conference Call and Webcast Information

Radisys will host a conference call on Tuesday, April 28, 2015 at 5:00 p.m. ET to discuss its first quarter 2015 results and financial outlook for the second quarter of 2015.

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 # 26660893. 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. on May 14, 2015. To access the replay, dial 855-859-2056 or 404-537-3406 and reference conference ID# 26660893. 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/.

About Radisys

Radisys (NASDAQ: RSYS) helps communications and content providers, and their strategic partners, create new revenue streams and drive cost out of their services delivery infrastructure. Radisys’ service aware traffic distribution platforms, real-time media processing engines and wireless access technologies enable its customers to maximize, virtualize and monetize their networks.

Forward-Looking Statements

This press release contains forward-looking statements, including statements about the Company's business strategy, changes in reporting segments financial outlook and expectations for 2015 and for the second quarter 2015, and statements related to revenue and gross margins from our respective segments and product lines, investments in future growth, expense savings or reductions, increased profitability, product line focus, 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, customer requirements, outcome of product trials, 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) customer implementation of traffic management solutions, (b) the outcome of product trials, (c) the market success of customers' products and solutions, (d) the development and transition of new products and solutions, (e) the enhancement of existing products and solutions to meet customer needs and respond to emerging technological trends, (f) the Company's dependence on certain customers and high degree of customer concentration, (g) the Company's use of one contract manufacturer for a significant portion of the production of its products, including the success of transitioning contract manufacturing partners, (h) the anticipated amount and timing of revenues from design wins due to the Company's customers' product development time, cancellations or delays, (i) matters affecting the software and embedded product industry, including changes in industry standards, changes in customer requirements and new product introductions, (j) actions by regulatory authorities or other third parties, (k) cash generation, (l) changes in tariff and trade policies and other risks associated with foreign operations, (m) fluctuations in currency exchange rates, (n) the ability of the Company to successfully complete any restructuring, acquisition or divestiture activities, (o) risks relating to fluctuations in the Company's operating results, the uncertainty of revenues and profitability and the potential need to raise additional funding and (p) 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, 2014, 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 April 28, 2015. 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

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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) amortization of acquired intangible assets, (b) stock-based compensation expense, (c) restructuring and other charges (reversals), net, (d) non-cash income tax expense, (e) gain on life insurance asset and (f) gain on sale of land held for sale. 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.

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
	March 31,
	2015			2014
Revenues	$	48,687		$	43,799
Cost of sales:
Cost of sales	34,067			30,597
Amortization of purchased technology	1,994			2,054
Gross margin	12,626			11,148
Operating expenses:
Research and development	6,724			8,419
Selling, general and administrative	7,500			9,596
Intangible assets amortization	1,260			1,297
Restructuring and other charges, net	4,135			1,300
Loss from operations	(6,993		)	(9,464		)
Interest expense	(217		)	(287		)
Other income, net	397			179
Loss before income tax expense	(6,813		)	(9,572		)
Income tax expense	240			862
Net loss	$	(7,053	)	$	(10,434	)
Net loss per share:
Basic	$	(0.19	)	$	(0.35	)
Diluted	$	(0.19	)	$	(0.35	)
Weighted average shares outstanding
Basic	36,649			29,864
Diluted	36,649			29,864

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CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

	March 31, 2015			December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	15,846		$	31,242
Accounts receivable, net	41,716			43,845
Inventories and inventory deposit, net	15,727			18,475
Other current assets	5,395			9,822
Total current assets	78,684			103,384
Property and equipment, net	8,791			9,786
Intangible assets, net	39,970			43,224
Other assets, net	3,945			4,326
Total assets	$	131,390		$	160,720
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	25,385		$	33,679
Deferred revenue	7,455			6,204
Other accrued liabilities	14,669			12,261
Line of credit	10,000			10,000
Convertible senior notes	—			18,000
Total current liabilities	57,509			80,144
Other long-term liabilities	2,820			2,800
Total liabilities	60,329			82,944
Shareholders' equity:
Common stock	334,691			334,024
Accumulated deficit	(263,724		)	(256,671		)
Accumulated other comprehensive income	94			423
Total shareholders’ equity	71,061			77,776
Total liabilities and shareholders’ equity	$	131,390		$	160,720

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited)
	Three Months Ended
	March 31,
	2015			2014
Cash flows from operating activities:
Net loss	$	(7,053	)	$	(10,434	)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization	4,778			5,245
Stock-based compensation expense	659			1,121
Other	384			2,774
Changes in operating assets and liabilities:
Accounts receivable	2,064			3,901
Inventories	2,769			385
Other receivables	3,883			—
Accounts payable	(8,183		)	(2,713		)
Deferred revenue	1,251			2,791
Other operating assets and liabilities	3,076			(6,274		)
Net cash provided by (used in) operating activities	3,628			(3,204		)
Cash flows from investing activities:
Capital expenditures	(640		)	(678		)
Net cash used in investing activities	(640		)	(678		)
Cash flows from financing activities:
Borrowings on line of credit	7,000			—
Payments on line of credit	(7,000		)	—
Repayment of convertible senior notes	(18,000		)	—
Proceeds from issuance of common stock	94			20,880
Other financing activities, net	(86		)	(235		)
Net cash provided by (used in) financing activities	(17,992		)	20,645
Effect of exchange rate changes on cash and cash equivalents	(392		)	19
Net increase (decrease) in cash and cash equivalents	(15,396		)	16,782
Cash and cash equivalents, beginning of period	31,242			25,482
Cash and cash equivalents, end of period	$	15,846		$	42,264

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REVENUES, GROSS MARGIN AND INCOME (LOSS) FROM OPERATIONS BY OPERATING SEGMENT

(In thousands, unaudited)

	Three Months Ended
	March 31,
	2015		2014
Revenue
Software-Systems	$	9,689	$	7,841
Embedded Products and Hardware Services	38,998		35,958
Total revenues	$	48,687	$	43,799

	Three Months Ended
	March 31,
	2015			2014
Gross margin
Software-Systems	$	5,328		$	5,198
Embedded Products and Hardware Services	9,344			8,135
Corporate and other	(2,046		)	(2,185		)
Total gross margin	$	12,626		$	11,148

	Three Months Ended
	March 31,
	2015			2014
Income (loss) from operations
Software-Systems	$	(2,902	)	$	(2,864	)
Embedded Products and Hardware Services	3,957			(828		)
Corporate and other	(8,048		)	(5,772		)
Total loss from operations	$	(6,993	)	$	(9,464	)

REVENUES BY GEOGRAPHY

(In thousands, unaudited)

	Three Months Ended
	March 31,
	2015				2014
North America	$	21,217	43.6	%	$	16,830	38.5	%
Asia Pacific	17,185		35.3		17,495		39.9
Europe, the Middle East and Africa	10,285		21.1		9,474		21.6
Total	$	48,687	100.0	%	$	43,799	100.0	%

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

(In thousands, except per share amounts, unaudited)

	Three Months Ended
	March 31
	2015					2014
GROSS MARGIN:
GAAP gross margin	$	12,626		25.9	%	$	11,148		25.5	%
(a) Amortization of acquired intangible assets	1,994					2,054
(b) Stock-based compensation	52					131
Non-GAAP gross margin	$	14,672		30.1	%	$	13,333		30.4	%
RESEARCH AND DEVELOPMENT:
GAAP research and development	$	6,724		13.8	%	$	8,419		19.2	%
(b) Stock-based compensation	132					229
Non-GAAP research and development	$	6,592		13.5	%	$	8,190		18.7	%
SELLING, GENERAL AND ADMINISTRATIVE:
GAAP selling, general and administrative	$	7,500		15.4	%	$	9,596		21.9	%
(b) Stock-based compensation	475					(761		)
Non-GAAP selling, general and administrative	$	7,025		14.4	%	$	8,835		20.2	%
INCOME (LOSS) FROM OPERATIONS:
GAAP loss from operations	$	(6,993	)	(14.4	)%	$	(9,464	)	(21.6	)%
(a) Amortization of acquired intangible assets	3,254					3,351
(b) Stock-based compensation	659					1,121
(c) Restructuring and acquisition-related charges, net	4,135					1,300
Non-GAAP income (loss) from operations	$	1,055		2.2	%	$	(3,692	)	(8.4	)%
NET INCOME (LOSS):
GAAP net loss	$	(7,053	)	(14.5	)%	$	(10,434	)	(23.8	)%
(a) Amortization of acquired intangible assets	3,254					3,351
(b) Stock-based compensation	659					1,121
(c) Restructuring and acquisition-related charges, net	4,135					1,300
(d) Income taxes	184					477
Non-GAAP net income (loss)	$	1,179		2.4	%	$	(4,185	)	(9.6	)%
GAAP weighted average diluted shares	36,649					29,864
Dilutive equity awards included in
non-GAAP earnings per share	109					—
Non-GAAP weighted average diluted shares	36,758					29,864
GAAP net loss per share (diluted)	$	(0.19	)			$	(0.35	)
Non-GAAP adjustments detailed above	0.22					0.21
Non-GAAP net income (loss) per share (diluted)	$	0.03				$	(0.14	)

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RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE

NET INCOME (LOSS) PER SHARE

(In millions, except per share amounts, unaudited)

	Three Months Ended
	June 30, 2015
	Low End			High End
GAAP net loss	(6.1		)	(2.5		)
(a) Amortization of acquired intangible assets	3.3			3.3
(b) Stock-based compensation	1.1			1.0
(c) Restructuring and acquisition-related charges, net	1.5			0.5
(d) Income taxes	0.3			0.1
Total adjustments	6.2			4.9
Non-GAAP net income	$	0.1		$	2.4
GAAP weighted average shares	36,800			36,800
Non-GAAP adjustments	200			1,000
Non-GAAP weighted average shares (diluted)	37,000			37,800
GAAP net loss per share	(0.16		)	(0.07		)
Non-GAAP adjustments detailed above	0.16			0.13
Non-GAAP net income per share (diluted)	$	0.00		$	0.06

RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE

GROSS MARGIN

(unaudited)

	Estimates at the midpoint of the guidance range
	Three Months Ended
	June 30, 2015
GAAP	28.0	%
(a) Amortization of acquired intangible assets	4.5
(b) Stock-based compensation	0.5
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
	June 30, 2015
GAAP	$	13.5
(b) Stock-based compensation	1.0
Non-GAAP	$	14.5

Non-GAAP financial measures includes the performance of Software-Systems and Embedded Products and Hardware Services.

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

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(a) Amortization of acquired intangible assets: Amortization of acquisition-related intangible assets primarily relate to core and existing technologies, trade name and customer relationships that were acquired with the acquisitions of Continuous Computing 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.

(b) 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.

(c) Restructuring and other charges, net: Restructuring and other charges, net relates to costs associated with non-recurring events. These include costs incurred for employee severance, acquisition or divestiture activities, excess facility costs, certain legal costs, asset related charges and other expenses associated with business restructuring activities. 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.

(d) 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.

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