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) |
Exhibit Number | Description | |
99.1 | Second Quarter 2015 Earnings Release, dated July 28, 2015 |
RADISYS CORPORATION | ||||
Date: | July 28, 2015 | By: | /s/ Jonathan Wilson | |
Jonathan Wilson | ||||
Chief Financial Officer and Vice President of Finance (Principal Financial and Accounting Officer) |
Exhibit Number | Description | |
99.1 | Press Release, dated July 28, 2015. |
• | Consolidated revenue of $47.0 million; |
• | Non-GAAP gross margin of 31.2%, an increase of 280 bps year-on-year; |
• | Non-GAAP earnings per share of $0.03, an increase of $0.10 year-on-year; and |
• | Cash generation of $2.7 million. |
• | Revenue is expected between $43 million and $47 million. |
• | Non-GAAP gross margin is expected between 35% and 37% and non-GAAP R&D and SG&A expenses are expected to approximate $13.8 million. |
• | Non-GAAP earnings are expected to range from $0.03 to $0.09 per share. |
• | Cash is expected to decrease by approximately $1.0 million as the result of extended payment terms with the large Asian carrier deploying MediaEngine product. |
• | Radisys increased its full year revenue outlook to now approximate $180 million, which is at the high end of the Company’s initial expectations of $160 to $180 million. |
• | Cash generation, net of debt repayments, is now expected to be $7 million, down from prior guidance of $10 million. Given extended payment terms on the $11 million MediaEngine order secured in the second quarter of 2015, over $3 million of customer payments are now expected in the first quarter of 2016. |
• | All other guidance remains unchanged from the Company’s press release dated February 3, 2015. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues | $ | 47,049 | $ | 49,964 | $ | 95,736 | $ | 93,763 | |||||||
Cost of sales: | |||||||||||||||
Cost of sales | 32,468 | 35,902 | 66,535 | 66,499 | |||||||||||
Amortization of purchased technology | 1,980 | 2,055 | 3,974 | 4,109 | |||||||||||
Gross margin | 12,601 | 12,007 | 25,227 | 23,155 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 6,840 | 8,408 | 13,564 | 16,827 | |||||||||||
Selling, general and administrative | 7,475 | 8,953 | 14,975 | 18,549 | |||||||||||
Intangible assets amortization | 1,260 | 1,260 | 2,520 | 2,557 | |||||||||||
Restructuring and other charges, net | 559 | 815 | 4,694 | 2,115 | |||||||||||
Loss from operations | (3,533 | ) | (7,429 | ) | (10,526 | ) | (16,893 | ) | |||||||
Interest expense | (103 | ) | (345 | ) | (320 | ) | (632 | ) | |||||||
Other income, net | 161 | 157 | 558 | 336 | |||||||||||
Loss before income tax expense | (3,475 | ) | (7,617 | ) | (10,288 | ) | (17,189 | ) | |||||||
Income tax expense | 644 | 594 | 884 | 1,456 | |||||||||||
Net loss | $ | (4,119 | ) | $ | (8,211 | ) | $ | (11,172 | ) | $ | (18,645 | ) | |||
Net loss per share: | |||||||||||||||
Basic | $ | (0.11 | ) | $ | (0.23 | ) | $ | (0.30 | ) | $ | (0.57 | ) | |||
Diluted | $ | (0.11 | ) | $ | (0.23 | ) | $ | (0.30 | ) | $ | (0.57 | ) | |||
Weighted average shares outstanding | |||||||||||||||
Basic | 36,741 | 36,096 | 36,695 | 32,980 | |||||||||||
Diluted | 36,741 | 36,096 | 36,695 | 32,980 |
June 30, 2015 | December 31, 2014 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 18,549 | $ | 31,242 | |||
Accounts receivable, net | 38,951 | 43,845 | |||||
Inventories and inventory deposit, net | 14,815 | 18,475 | |||||
Other current assets | 6,715 | 9,822 | |||||
Total current assets | 79,030 | 103,384 | |||||
Property and equipment, net | 7,625 | 9,786 | |||||
Intangible assets, net | 36,730 | 43,224 | |||||
Other assets, net | 3,788 | 4,326 | |||||
Total assets | $ | 127,173 | $ | 160,720 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 25,991 | $ | 33,679 | |||
Deferred revenue | 6,570 | 6,204 | |||||
Other accrued liabilities | 13,370 | 12,261 | |||||
Line of credit | 10,000 | 10,000 | |||||
Convertible senior notes | — | 18,000 | |||||
Total current liabilities | 55,931 | 80,144 | |||||
Other long-term liabilities | 3,035 | 2,800 | |||||
Total liabilities | 58,966 | 82,944 | |||||
Shareholders' equity: | |||||||
Common stock | 335,893 | 334,024 | |||||
Accumulated deficit | (267,843 | ) | (256,671 | ) | |||
Accumulated other comprehensive income | 157 | 423 | |||||
Total shareholders’ equity | 68,207 | 77,776 | |||||
Total liabilities and shareholders’ equity | $ | 127,173 | $ | 160,720 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net loss | $ | (4,119 | ) | $ | (8,211 | ) | $ | (11,172 | ) | $ | (18,645 | ) | |||
Adjustments to reconcile net loss to net cash | |||||||||||||||
provided by (used in) operating activities: | |||||||||||||||
Depreciation and amortization | 4,696 | 5,091 | 9,474 | 10,336 | |||||||||||
Stock-based compensation expense | 1,140 | 1,460 | 1,799 | 2,581 | |||||||||||
Other | 346 | 796 | 730 | 3,570 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | 2,843 | (4,466 | ) | 4,907 | (565 | ) | |||||||||
Inventories | 607 | 3,953 | 3,376 | 4,338 | |||||||||||
Other receivables | (1,376 | ) | (5,389 | ) | 2,507 | (7,096 | ) | ||||||||
Accounts payable | 594 | 2,393 | (7,589 | ) | (320 | ) | |||||||||
Deferred revenue | (885 | ) | 1,545 | 366 | 4,336 | ||||||||||
Other operating assets and liabilities | (860 | ) | 710 | 2,216 | (3,857 | ) | |||||||||
Net cash provided by (used in) operating activities | 2,986 | (2,118 | ) | 6,614 | (5,322 | ) | |||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (406 | ) | (599 | ) | (1,046 | ) | (1,277 | ) | |||||||
Net cash used in investing activities | (406 | ) | (599 | ) | (1,046 | ) | (1,277 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings on line of credit | 1,500 | — | 8,500 | — | |||||||||||
Payments on line of credit | (1,500 | ) | (5,000 | ) | (8,500 | ) | (5,000 | ) | |||||||
Repayment of convertible senior notes | — | — | (18,000 | ) | — | ||||||||||
Proceeds from issuance of common stock | 73 | 140 | 167 | 21,020 | |||||||||||
Other financing activities, net | (11 | ) | (66 | ) | (97 | ) | (301 | ) | |||||||
Net cash provided by (used in) financing activities | 62 | (4,926 | ) | (17,930 | ) | 15,719 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 61 | (15 | ) | (331 | ) | 4 | |||||||||
Net increase (decrease) in cash and cash equivalents | 2,703 | (7,658 | ) | (12,693 | ) | 9,124 | |||||||||
Cash and cash equivalents, beginning of period | 15,846 | 42,264 | 31,242 | 25,482 | |||||||||||
Cash and cash equivalents, end of period | $ | 18,549 | $ | 34,606 | $ | 18,549 | $ | 34,606 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue | ||||||||||||||||
Software-Systems | $ | 14,170 | $ | 10,400 | $ | 23,859 | $ | 18,241 | ||||||||
Embedded Products and Hardware Services | 32,879 | 39,564 | 71,877 | 75,522 | ||||||||||||
Total revenues | $ | 47,049 | $ | 49,964 | $ | 95,736 | $ | 93,763 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Gross margin | ||||||||||||||||
Software-Systems | $ | 7,945 | $ | 5,816 | $ | 13,273 | $ | 11,014 | ||||||||
Embedded Products and Hardware Services | 6,725 | 8,397 | 16,069 | 16,532 | ||||||||||||
Corporate and other | (2,069 | ) | (2,206 | ) | (4,115 | ) | (4,391 | ) | ||||||||
Total gross margin | $ | 12,601 | $ | 12,007 | $ | 25,227 | $ | 23,155 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Income (loss) from operations | ||||||||||||||||
Software-Systems | $ | (967 | ) | $ | (1,848 | ) | $ | (3,869 | ) | $ | (4,712 | ) | ||||
Embedded Products and Hardware Services | 2,373 | 9 | 6,330 | (819 | ) | |||||||||||
Corporate and other | (4,939 | ) | (5,590 | ) | (12,987 | ) | (11,362 | ) | ||||||||
Total loss from operations | $ | (3,533 | ) | $ | (7,429 | ) | $ | (10,526 | ) | $ | (16,893 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
North America | $ | 18,714 | 39.7 | % | $ | 19,604 | 39.3 | % | $ | 39,931 | 41.7 | % | $ | 36,434 | 38.9 | % | |||||||
Asia Pacific | 21,625 | 46.0 | 15,600 | 31.2 | 38,810 | 40.5 | 33,095 | 35.3 | |||||||||||||||
Europe, the Middle East and Africa | 6,710 | 14.3 | 14,760 | 29.5 | 16,995 | 17.8 | 24,234 | 25.8 | |||||||||||||||
Total | $ | 47,049 | 100.0 | % | $ | 49,964 | 100.0 | % | $ | 95,736 | 100.0 | % | $ | 93,763 | 100.0 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||
GAAP gross margin | $ | 12,601 | 26.8 | % | $ | 12,007 | 24.0 | % | $ | 25,227 | 26.4 | % | $ | 23,155 | 24.7 | % | |||||||
(a) Amortization of acquired intangible assets | 1,980 | 2,055 | 3,973 | 4,109 | |||||||||||||||||||
(b) Stock-based compensation | 89 | 151 | 142 | 282 | |||||||||||||||||||
Non-GAAP gross margin | $ | 14,670 | 31.2 | % | $ | 14,213 | 28.4 | % | $ | 29,342 | 30.6 | % | $ | 27,546 | 29.4 | % | |||||||
RESEARCH AND DEVELOPMENT: | |||||||||||||||||||||||
GAAP research and development | $ | 6,840 | 14.5 | % | $ | 8,408 | 16.8 | % | $ | 13,564 | 14.2 | % | $ | 16,827 | 17.9 | % | |||||||
(b) Stock-based compensation | 257 | 324 | 389 | 553 | |||||||||||||||||||
Non-GAAP research and development | $ | 6,583 | 14.0 | % | $ | 8,084 | 16.2 | % | $ | 13,175 | 13.8 | % | $ | 16,274 | 17.4 | % | |||||||
SELLING, GENERAL AND ADMINISTRATIVE: | |||||||||||||||||||||||
GAAP selling, general and administrative | $ | 7,475 | 15.9 | % | $ | 8,953 | 17.9 | % | $ | 14,975 | 15.6 | % | $ | 18,549 | 19.8 | % | |||||||
(b) Stock-based compensation | 794 | 985 | 1,268 | 1,746 | |||||||||||||||||||
Non-GAAP selling, general and administrative | $ | 6,681 | 14.2 | % | $ | 7,968 | 15.9 | % | $ | 13,707 | 14.3 | % | $ | 16,803 | 17.9 | % | |||||||
INCOME (LOSS) FROM OPERATIONS: | |||||||||||||||||||||||
GAAP loss from operations | $ | (3,533 | ) | (7.5 | )% | $ | (7,429 | ) | (14.9 | )% | $ | (10,526 | ) | (11.0 | )% | $ | (16,893 | ) | (18.0 | )% | |||
(a) Amortization of acquired intangible assets | 3,240 | 3,315 | 6,494 | 6,666 | |||||||||||||||||||
(b) Stock-based compensation | 1,140 | 1,460 | 1,799 | 2,581 | |||||||||||||||||||
(c) Restructuring and acquisition-related charges, net | 559 | 815 | 4,694 | 2,115 | |||||||||||||||||||
Non-GAAP income (loss) from operations | $ | 1,406 | 3.0 | % | $ | (1,839 | ) | (3.7 | )% | $ | 2,461 | 2.6 | % | $ | (5,531 | ) | (5.9 | )% | |||||
NET INCOME (LOSS): | |||||||||||||||||||||||
GAAP net loss | $ | (4,119 | ) | (8.8 | )% | $ | (8,211 | ) | (16.4 | )% | $ | (11,172 | ) | (11.7 | )% | $ | (18,645 | ) | (19.9 | )% | |||
(a) Amortization of acquired intangible assets | 3,240 | 3,315 | 6,494 | 6,666 | |||||||||||||||||||
(b) Stock-based compensation | 1,140 | 1,460 | 1,799 | 2,581 | |||||||||||||||||||
(c) Restructuring and acquisition-related charges, net | 559 | 815 | 4,694 | 2,115 | |||||||||||||||||||
(d) Income taxes | 314 | 119 | 498 | 596 | |||||||||||||||||||
Non-GAAP net income (loss) | $ | 1,134 | 2.4 | % | $ | (2,502 | ) | (5.0 | )% | $ | 2,313 | 2.4 | % | $ | (6,687 | ) | (7.1 | )% | |||||
GAAP weighted average diluted shares | 36,741 | 36,096 | 36,695 | 32,980 | |||||||||||||||||||
Dilutive equity awards included in | |||||||||||||||||||||||
non-GAAP earnings per share | 193 | — | 151 | — | |||||||||||||||||||
Non-GAAP weighted average diluted shares | 36,934 | 36,096 | 36,846 | 32,980 | |||||||||||||||||||
GAAP net loss per share (diluted) | $ | (0.11 | ) | $ | (0.23 | ) | $ | (0.30 | ) | $ | (0.57 | ) | |||||||||||
Non-GAAP adjustments detailed above | 0.14 | 0.16 | 0.36 | 0.37 | |||||||||||||||||||
Non-GAAP net income (loss) per share (diluted) | $ | 0.03 | $ | (0.07 | ) | $ | 0.06 | $ | (0.20 | ) |
Three Months Ended | ||||||||
September 30, 2015 | ||||||||
Low End | High End | |||||||
GAAP net loss | (4.0 | ) | (1.8 | ) | ||||
(a) Amortization of acquired intangible assets | 3.3 | 3.3 | ||||||
(b) Stock-based compensation | 1.1 | 1.1 | ||||||
(c) Restructuring and acquisition-related charges, net | 0.5 | 0.4 | ||||||
(d) Income taxes | 0.3 | 0.2 | ||||||
Total adjustments | 5.2 | 5.0 | ||||||
Non-GAAP net income | $ | 1.2 | $ | 3.2 | ||||
GAAP weighted average shares | 37,000 | 37,000 | ||||||
Non-GAAP adjustments | 200 | 200 | ||||||
Non-GAAP weighted average shares (diluted) | 37,200 | 37,200 | ||||||
GAAP net loss per share | (0.11 | ) | (0.05 | ) | ||||
Non-GAAP adjustments detailed above | 0.14 | 0.12 | ||||||
Non-GAAP net income per share (diluted) | $ | 0.03 | $ | 0.09 |
Estimates at the midpoint of the guidance range | ||
Three Months Ended | ||
September 30, 2015 | ||
GAAP | 31.4 | % |
(a) Amortization of acquired intangible assets | 4.4 | |
(b) Stock-based compensation | 0.2 | |
Non-GAAP | 36.0 | % |
Estimates at the midpoint of the guidance range | |||
Three Months Ended | |||
September 30, 2015 | |||
GAAP | $ | 14.8 | |
(b) Stock-based compensation | 1.0 | ||
Non-GAAP | $ | 13.8 |
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