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 2016 Earnings Release, dated July 26, 2016 |
RADISYS CORPORATION | ||||
Date: | July 26, 2016 | By: | /s/ Jonathan Wilson | |
Jonathan Wilson | ||||
Chief Financial Officer and Vice President of Finance (Principal Financial and Accounting Officer) |
Exhibit Number | Description | |
99.1 | Second Quarter 2016 Earnings Release, dated July 26, 2016 |
Company Contact | Investor Contact | |
Jon Wilson | Brett L. Perry | |
Chief Financial Officer | Shelton Group | |
503-615-1685 | 214-272-0070 | |
jon.wilson@radisys.com | bperry@sheltongroup.com |
• | Consolidated revenue of $61.3 million resulted in 30% year-on-year revenue growth; |
• | Software-Systems revenue was $14.6 million, with gross margin of 62.8% expanding 670 basis points year-on-year; |
• | GAAP loss per share was $0.02, an improvement of $0.09 year-on-year. Non-GAAP earnings were $0.10 per diluted share, an increase of $0.07 per share year-on-year; and |
• | Fulfilled follow-on DCEngine orders of over $25 million from Tier 1 U.S. service provider. |
• | Revenue is expected between $48 million to $52 million. |
• | GAAP gross margin is expected to approximate 28% at the midpoint and GAAP R&D and SG&A expenses are expected to be approximately $15 million. Non-GAAP gross margin is expected between 31% to 33% of sales and total non-GAAP R&D and SG&A expenses are expected to approximate $14 million. |
• | GAAP loss is expected to range from a loss of $0.10 to $0.06 per share. Non-GAAP earnings are expected to range from $0.02 to $0.06 per diluted share. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | $ | 61,288 | $ | 47,049 | $ | 116,434 | $ | 95,736 | |||||||
Cost of sales: | |||||||||||||||
Cost of sales | 43,916 | 32,468 | 84,351 | 66,535 | |||||||||||
Amortization of purchased technology | 1,927 | 1,980 | 3,854 | 3,974 | |||||||||||
Gross margin | 15,445 | 12,601 | 28,229 | 25,227 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 6,298 | 6,840 | 11,951 | 13,564 | |||||||||||
Selling, general and administrative | 8,554 | 7,475 | 16,193 | 14,975 | |||||||||||
Intangible assets amortization | 1,260 | 1,260 | 2,520 | 2,520 | |||||||||||
Restructuring and other charges, net | 265 | 559 | 947 | 4,694 | |||||||||||
Loss from operations | (932 | ) | (3,533 | ) | (3,382 | ) | (10,526 | ) | |||||||
Interest expense | (159 | ) | (103 | ) | (276 | ) | (320 | ) | |||||||
Other income, net | 1,069 | 161 | 1,208 | 558 | |||||||||||
Loss before income tax expense | (22 | ) | (3,475 | ) | (2,450 | ) | (10,288 | ) | |||||||
Income tax expense | 569 | 644 | 1,106 | 884 | |||||||||||
Net loss | $ | (591 | ) | $ | (4,119 | ) | $ | (3,556 | ) | $ | (11,172 | ) | |||
Net loss per share: | |||||||||||||||
Basic | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.10 | ) | $ | (0.30 | ) | |||
Diluted | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.10 | ) | $ | (0.30 | ) | |||
Weighted average shares outstanding | |||||||||||||||
Basic | 37,143 | 36,741 | 37,075 | 36,695 | |||||||||||
Diluted | 37,143 | 36,741 | 37,075 | 36,695 |
June 30, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 30,926 | $ | 20,764 | |||
Accounts receivable, net | 43,005 | 60,942 | |||||
Inventories and deferred cost of sales, net | 23,301 | 30,925 | |||||
Other current assets | 6,965 | 14,098 | |||||
Total current assets | 104,197 | 126,729 | |||||
Property and equipment, net | 5,052 | 6,134 | |||||
Intangible assets, net | 23,949 | 30,322 | |||||
Other assets, net | 3,982 | 3,884 | |||||
Total assets | $ | 137,180 | $ | 167,069 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 24,740 | $ | 43,451 | |||
Deferred revenue | 5,703 | 23,062 | |||||
Other accrued liabilities | 14,027 | 16,654 | |||||
Line of credit | 25,000 | 15,000 | |||||
Total current liabilities | 69,470 | 98,167 | |||||
Other long-term liabilities | 3,129 | 2,985 | |||||
Total liabilities | 72,599 | 101,152 | |||||
Shareholders' equity: | |||||||
Common stock | 340,524 | 338,165 | |||||
Accumulated deficit | (274,905 | ) | (271,349 | ) | |||
Accumulated other comprehensive income | (1,038 | ) | (899 | ) | |||
Total shareholders’ equity | 64,581 | 65,917 | |||||
Total liabilities and shareholders’ equity | $ | 137,180 | $ | 167,069 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net loss | $ | (591 | ) | $ | (4,119 | ) | $ | (3,556 | ) | $ | (11,172 | ) | |||
Adjustments to reconcile net loss to net cash | |||||||||||||||
provided by (used in) operating activities: | |||||||||||||||
Depreciation and amortization | 4,248 | 4,696 | 8,593 | 9,474 | |||||||||||
Stock-based compensation expense | 1,192 | 1,140 | 1,880 | 1,799 | |||||||||||
Other | (309 | ) | 922 | 621 | 1,737 | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | (4,205 | ) | 2,843 | 17,929 | 4,907 | ||||||||||
Inventories and deferred cost of sales | 4,525 | 607 | 5,103 | 3,376 | |||||||||||
Other receivables | (1,247 | ) | (1,376 | ) | 7,007 | 2,507 | |||||||||
Accounts payable | (6,549 | ) | 594 | (18,704 | ) | (7,589 | ) | ||||||||
Deferred revenue | (666 | ) | (885 | ) | (17,359 | ) | 366 | ||||||||
Other operating assets and liabilities | 2,543 | (1,436 | ) | (891 | ) | 1,209 | |||||||||
Net cash provided by operating activities | (1,059 | ) | 2,986 | 623 | 6,614 | ||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (708 | ) | (406 | ) | (1,130 | ) | (1,046 | ) | |||||||
Net cash used in investing activities | (708 | ) | (406 | ) | (1,130 | ) | (1,046 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings on line of credit, net | 10,000 | — | 10,000 | — | |||||||||||
Repayment of convertible senior notes | — | — | — | (18,000 | ) | ||||||||||
Other financing activities, net | 374 | 62 | 479 | 70 | |||||||||||
Net cash provided by (used in) financing activities | 10,374 | 62 | 10,479 | (17,930 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (64 | ) | 61 | 190 | (331 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 8,543 | 2,703 | 10,162 | (12,693 | ) | ||||||||||
Cash and cash equivalents, beginning of period | 22,383 | 15,846 | 20,764 | 31,242 | |||||||||||
Cash and cash equivalents, end of period | $ | 30,926 | $ | 18,549 | $ | 30,926 | $ | 18,549 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenue | ||||||||||||||||
Software-Systems | $ | 14,601 | $ | 14,170 | $ | 28,660 | $ | 23,859 | ||||||||
Embedded Products and Hardware Services | 46,687 | 32,879 | 87,774 | 71,877 | ||||||||||||
Total revenues | $ | 61,288 | $ | 47,049 | $ | 116,434 | $ | 95,736 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Gross margin | ||||||||||||||||
Software-Systems | $ | 9,172 | $ | 7,945 | $ | 17,960 | $ | 13,273 | ||||||||
Embedded Products and Hardware Services | 8,331 | 6,725 | 14,300 | 16,069 | ||||||||||||
Corporate and other | (2,058 | ) | (2,069 | ) | (4,031 | ) | (4,115 | ) | ||||||||
Total gross margin | $ | 15,445 | $ | 12,601 | $ | 28,229 | $ | 25,227 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Income (loss) from operations | ||||||||||||||||
Software-Systems | $ | 31 | $ | (967 | ) | $ | 811 | $ | (3,869 | ) | ||||||
Embedded Products and Hardware Services | 3,681 | 2,373 | 5,008 | 6,330 | ||||||||||||
Corporate and other | (4,644 | ) | (4,939 | ) | (9,201 | ) | (12,987 | ) | ||||||||
Total loss from operations | $ | (932 | ) | $ | (3,533 | ) | $ | (3,382 | ) | $ | (10,526 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||
North America | $ | 44,314 | 72.3 | % | $ | 18,714 | 39.7 | % | $ | 82,157 | 70.6 | % | $ | 39,931 | 41.7 | % | |||||||
Asia Pacific | 6,461 | 10.5 | 21,625 | 46.0 | 14,079 | 12.1 | 38,810 | 40.5 | |||||||||||||||
Europe, the Middle East and Africa | 10,513 | 17.2 | 6,710 | 14.3 | 20,198 | 17.3 | 16,995 | 17.8 | |||||||||||||||
Total | $ | 61,288 | 100.0 | % | $ | 47,049 | 100.0 | % | $ | 116,434 | 100.0 | % | $ | 95,736 | 100.0 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||
GAAP gross margin | $ | 15,445 | 25.2 | % | $ | 12,601 | 26.8 | % | $ | 28,229 | 24.2 | % | $ | 25,227 | 26.4 | % | |||||||
(a) Amortization of acquired intangible assets | 1,927 | 1,980 | 3,854 | 3,973 | |||||||||||||||||||
(b) Stock-based compensation | 131 | 89 | 177 | 142 | |||||||||||||||||||
Non-GAAP gross margin | $ | 17,503 | 28.6 | % | $ | 14,670 | 31.2 | % | $ | 32,260 | 27.7 | % | $ | 29,342 | 30.6 | % | |||||||
RESEARCH AND DEVELOPMENT: | |||||||||||||||||||||||
GAAP research and development | $ | 6,298 | 10.3 | % | $ | 6,840 | 14.5 | % | $ | 11,951 | 10.3 | % | $ | 13,564 | 14.2 | % | |||||||
(b) Stock-based compensation | 285 | 257 | 438 | 389 | |||||||||||||||||||
Non-GAAP research and development | $ | 6,013 | 9.8 | % | $ | 6,583 | 14.0 | % | $ | 11,513 | 9.9 | % | $ | 13,175 | 13.8 | % | |||||||
SELLING, GENERAL AND ADMINISTRATIVE: | |||||||||||||||||||||||
GAAP selling, general and administrative | $ | 8,554 | 14.0 | % | $ | 7,475 | 15.9 | % | $ | 16,193 | 13.9 | % | $ | 14,975 | 15.6 | % | |||||||
(b) Stock-based compensation | 776 | 794 | 1,265 | 1,268 | |||||||||||||||||||
Non-GAAP selling, general and administrative | $ | 7,778 | 12.7 | % | $ | 6,681 | 14.2 | % | $ | 14,928 | 12.8 | % | $ | 13,707 | 14.3 | % | |||||||
INCOME (LOSS) FROM OPERATIONS: | |||||||||||||||||||||||
GAAP loss from operations | $ | (932 | ) | (1.5 | )% | $ | (3,533 | ) | (7.5 | )% | $ | (3,382 | ) | (2.9 | )% | $ | (10,526 | ) | (11.0 | )% | |||
(a) Amortization of acquired intangible assets | 3,187 | 3,240 | 6,374 | 6,494 | |||||||||||||||||||
(b) Stock-based compensation | 1,192 | 1,140 | 1,880 | 1,799 | |||||||||||||||||||
(c) Restructuring and acquisition-related charges, net | 265 | 559 | 947 | 4,694 | |||||||||||||||||||
Non-GAAP income from operations | $ | 3,712 | 6.1 | % | $ | 1,406 | 3.0 | % | $ | 5,819 | 5.0 | % | $ | 2,461 | 2.6 | % | |||||||
NET INCOME (LOSS): | |||||||||||||||||||||||
GAAP net loss | $ | (591 | ) | (1.0 | )% | $ | (4,119 | ) | (8.8 | )% | $ | (3,556 | ) | (3.1 | )% | $ | (11,172 | ) | (11.7 | )% | |||
(a) Amortization of acquired intangible assets | 3,187 | 3,240 | 6,374 | 6,494 | |||||||||||||||||||
(b) Stock-based compensation | 1,192 | 1,140 | 1,880 | 1,799 | |||||||||||||||||||
(c) Restructuring and acquisition-related charges, net | 265 | 559 | 947 | 4,694 | |||||||||||||||||||
(d) Income taxes | 109 | 314 | 278 | 498 | |||||||||||||||||||
(e) Gain on the liquidation of foreign subsidiaries | $ | (421 | ) | $ | — | $ | (421 | ) | $ | — | |||||||||||||
Non-GAAP net income | $ | 3,741 | 6.1 | % | $ | 1,134 | 2.4 | % | $ | 5,502 | 4.7 | % | $ | 2,313 | 2.4 | % | |||||||
GAAP weighted average diluted shares | 37,143 | 36,741 | 37,075 | 36,695 | |||||||||||||||||||
Dilutive equity awards included in | |||||||||||||||||||||||
non-GAAP earnings per share | 2,012 | 193 | 1,090 | 151 | |||||||||||||||||||
Non-GAAP weighted average diluted shares | 39,155 | 36,934 | 38,165 | 36,846 | |||||||||||||||||||
GAAP net loss per share (diluted) | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.10 | ) | $ | (0.30 | ) | |||||||||||
Non-GAAP adjustments detailed above | 0.12 | 0.14 | 0.24 | 0.36 | |||||||||||||||||||
Non-GAAP net income per share (diluted) | $ | 0.10 | $ | 0.03 | $ | 0.14 | $ | 0.06 |
Three Months Ended | ||||||||
September 30, 2016 | ||||||||
Low End | High End | |||||||
GAAP net loss | (4.0 | ) | (2.3 | ) | ||||
(a) Amortization of acquired intangible assets | 3.2 | 3.2 | ||||||
(b) Stock-based compensation | 1.2 | 1.0 | ||||||
(c) Restructuring and acquisition-related charges, net | 0.3 | 0.2 | ||||||
(d) Income taxes | 0.2 | 0.4 | ||||||
Total adjustments | 4.9 | 4.8 | ||||||
Non-GAAP net income | $ | 0.9 | $ | 2.5 | ||||
GAAP weighted average shares | 38,000 | 38,000 | ||||||
Non-GAAP adjustments | 1,500 | 2,000 | ||||||
Non-GAAP weighted average shares (diluted) | 39,500 | 40,000 | ||||||
GAAP net loss per share | (0.11 | ) | (0.06 | ) | ||||
Non-GAAP adjustments detailed above | 0.13 | 0.12 | ||||||
Non-GAAP net income per share (diluted) | $ | 0.02 | $ | 0.06 |
Estimates at the midpoint of the guidance range | ||
Three Months Ended | ||
September 30, 2016 | ||
GAAP | 28.0 | % |
(a) Amortization of acquired intangible assets | 3.8 | |
(b) Stock-based compensation | 0.2 | |
Non-GAAP | 32.0 | % |
Estimates at the midpoint of the guidance range | |||
Three Months Ended | |||
September 30, 2016 | |||
GAAP | $ | 15.0 | |
(b) Stock-based compensation | 1.0 | ||
Non-GAAP | $ | 14.0 |
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