8-K 1 v05487e8vk.htm FORM 8-K e8vk
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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): February 3, 2005

RADISYS CORPORATION

(Exact name of registrant as specified in its charter)
         
Oregon
(State or Other Jurisdiction
of Incorporation) 		  0-26844
(Commission
File Number) 		  93-0945232
(IRS Employer
Identification No.)
     
5445 NE Dawson Creek Drive
Hillsboro, Oregon
(Address of Principal Executive Offices) 		  97124
(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:

     
o
  Written communications pursuant to Rule 425 under the Securities Act
 
o
  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
 
o
  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
 
o
  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
 
 

 

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Item 2.02. Results of Operations and Financial Condition
Item 9.01. Financial Statements and Exhibits
SIGNATURE
EXHIBIT INDEX
EXHIBIT 99.1
EXHIBIT 99.2

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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 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 February 3, 2005, RadiSys Corporation issued a press release announcing its results for the fourth fiscal quarter and year ending December 31, 2004. A copy of this press release is attached hereto as Exhibit 99.1. Additionally, on February 3, 2005, RadiSys Corporation held a conference call discussing its results for the fourth fiscal quarter and year ending December 31, 2004. A copy of the text of this conference call is attached hereto as Exhibit 99.2.

     The conference call contained the following sentences that may be considered to have non-GAAP Financial Information as contemplated by SEC Regulation G, Rule 100:

“Our fourth quarter revenues, excluding the $1.4 million inventory sale, were derived from our three markets as follows...45%, or $27.3 million of fourth quarter revenues were from our Service Provider Systems market...22%, or $13.4 million of fourth quarter revenues were derived from our Enterprise Systems market...33%, or $20.6 million, of fourth quarter revenues were from our Commercial Systems market.”

“Our top five customers for the quarter were Avaya, Comverse, Diebold, Nokia, and Nortel. Collectively, they represented about 63% of our revenues for the quarter...From a geographic perspective, approximately 51% of our fourth quarter business was in Europe, 43% was in North America, and 6% in Asia Pacific. Again, this breakdown excludes the $1.4 million inventory sale in Q4.”

“The results for the quarter include a net restructuring charge of $1.4 million. Without the restructuring charge, our net income was approximately $4.0 million, including an additional $254 thousand in tax expense, and our diluted earnings per share for the quarter was $.18.”

“Without the $1.4 million inventory sale at zero margin, the fourth quarter gross margin percentage would have been 33% even. This is up half a point from in the prior quarter’s gross margin rate of 32.5%.”

“Operating expenses in Q4, excluding intangible amortization and the restructuring charge, totaled $15.1 million, up about $288 thousand from the prior quarter.”

     Accordingly, we are providing the following tables, which reconcile the information to the corresponding GAAP-based measure presented in our Consolidated Statements of Operations in the accompanying press release. Management believes the presentation of these non-GAAP financial measures, in connection with the results of the fourth fiscal quarter and year ended December 31, 2004, provides useful information to investors regarding our results of operations as these non-GAAP financial measures allow investors to better evaluate ongoing business performance and factors that influenced performance during the period under report. Management also uses these non-GAAP measures internally to monitor performance of the business. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

Reconciliation of reported revenues to GAAP revenues (in thousands):

         
    Three months ended  
    December 31, 2004  
Revenues (GAAP):
   $ 62,710  
Less: End-of-life inventory sale
     (1,413 )
 
      
Revenues, excluding the $1.4 million inventory sale
   $ 61,297  
 
      

Reconciliation of revenues from our Service Provider systems market (in thousands):

         
    Three months ended  
    December 31, 2004  
Service Provider systems market revenues (GAAP):
   $ 28,701  
Less: End-of-life inventory sale
     (1,413 )
 
      
Revenues, excluding the $1.4 million inventory sale
   $ 27,288  
 
      

 

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Reconciliation of end market revenues as a percentage of total revenues for the three months ended December 31, 2004:

                 
            As a percentage of  
            revenues, excluding  
    As a percentage of revenues     the $1.4 million  
    (GAAP)     inventory sale  
Service Provider Systems Market
     46 %     45 %
Enterprise Systems Market
     21 %     22 %
Commercial Systems Market
     33 %     33 %

Reconciliation of revenues associated with top 5 customers (in thousands):

         
    Three months ended  
    December 31, 2004  
Revenues for top five customers (GAAP):
   $ 39,769  
 
      
As a percentage of revenues (GAAP):
     63 %
 
Revenues for top five customers (GAAP):
   $ 39,769  
Less: End-of-life inventory sale
     (1,413 )
 
      
Revenues for top five customers, excluding the $1.4 million inventory sale
   $ 38,356  
 
      
As a percentage of revenues, excluding the $1.4 million inventory sale
     63 %

Reconciliation of reported revenues in Europe to GAAP revenues in Europe (in thousands):

         
    Three months ended  
    December 31, 2004  
Revenues (GAAP):
   $ 32,954  
Less: End-of-life inventory sale
     (1,413 )
 
      
Revenues, excluding the $1.4 million inventory sale
   $ 31,541  
 
      

Reconciliation of revenues by geographic region as reported to GAAP revenues by geographic region:

                         
            As a percentage of          
            revenues, excluding the          
    As a percentage of revenues     $1.4 million inventory          
    (GAAP)     sale          
North America
     42%           43%              
Europe
     52%           51%              
Asia Pacific
       6%             6%              

 

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Reconciliation of net income and diluted earnings per share, excluding restructuring charges, to GAAP net income and diluted earnings per share (in thousands, except per share data):

         
    Three months ended  
    December 31, 2004  
Net income (GAAP):
   $ 2,836  
 
      
Diluted earnings per share (GAAP):
   $ 0.13  
 
      
Diluted weighted average shares outstanding (GAAP):
     24,085  
 
      
 
Net income (GAAP):
   $ 2,836  
Add: Restructuring and other charges (reversals) (“restructuring charges”)
     1,442  
Deduct: Additional tax expense due to adding back restructuring charges
     (254 )
 
      
Net income, excluding restructuring charges
   $ 4,024  
 
      
Add: Interest expense on convertible senior notes, net of tax benefit
     328  
Adjusted numerator, excluding restructuring charges for the earnings per share calculation
   $ 4,352  
 
      
Diluted earnings per share, excluding restructuring charges
   $ 0.18  
 
      

Reconciliation of gross margin as a percentage of revenues to GAAP gross margin as a percentage of revenues (in thousands):

                 
    Three Months Ended  
    December 31, 2004     September 30, 2004  
Revenues (GAAP):
   $ 62,710     $ 61,746  
Cost of sales (GAAP):
     42,464       41,660  
 
            
Gross margin (GAAP):
   $ 20,246     $ 20,086  
 
            
Gross margin as a percentage of revenues (GAAP):
     32.3 %     32.5 %
 
            
 
End-of-life inventory sale:
   $ (1,413 )   $ —  
 
Comparable revenues (excluding end-of-life inventory sale)*:
   $ 61,297     $ 61,746  
Comparable cost of sales (excluding end-of-life inventory sale):
     41,051       41,660  
 
            
Comparable gross margin:
   $ 20,246     $ 20,086  
 
            
Comparable gross margin as a percentage of revenues:
     33.0 %     32.5 %
 
            

* Based on the reconciliation of revenues to GAAP revenues.

Reconciliation of reported operating expenses to GAAP operating expenses (in thousands):

                 
    Three Months Ended  
    December 31, 2004     September 30, 2004  
Operating Expenses (GAAP):
   $ 17,011     $ 15,710  
Less: Intangible amortization
     (514 )     (515 )
Less: Restructuring charges
     (1,442 )     (428 )
 
            
Comparable operating expenses:
   $ 15,055     $ 14,767  
 
            

Item 9.01. Financial Statements and Exhibits.

  (c)   Exhibits.

The following exhibits are furnished with this report on Form 8-K:

     
Exhibit    
Number   Description
 
99.1
  Press Release, dated February 3, 2005
 
99.2
  Text of conference call held February 3, 2005

 

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SIGNATURE

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

       
 
  RADISYS CORPORATION
an Oregon corporation		  
       
Date: February 8, 2005
  By:  /s/ Brian Bronson
     
  Name:  Brian Bronson
     
  Title:  Chief Accounting Officer
     

 

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EXHIBIT INDEX

     
Exhibit    
Number   Description
99.1
  Press Release, dated February 3, 2005
 
99.2
  Text of conference call held February 3, 2005