-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UOWI6FCbZjIVNxpBRj7AXzDbg0a4RY6e3mcjhv1Dh86ryKNDo54oN5nIGFa4iGyg WsQcvlyhqO4SwL4CEUZCeA== 0000912057-00-024449.txt : 20000516 0000912057-00-024449.hdr.sgml : 20000516 ACCESSION NUMBER: 0000912057-00-024449 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RADISYS CORP CENTRAL INDEX KEY: 0000873044 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 930945232 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-26844 FILM NUMBER: 632414 BUSINESS ADDRESS: STREET 1: 5445 NE DAWSON CREEK DR CITY: HILLSBORO STATE: OR ZIP: 97124 BUSINESS PHONE: 5036461800 10-Q 1 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-Q --------------- /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 0-26844 ------------------------ RADISYS CORPORATION (Exact name of registrant as specified in its charter) OREGON 93-0945232 (State or other jurisdiction (I.R.S. Employer Identification Number) of organization or incorporation)
5445 NE DAWSON CREEK DRIVE HILLSBORO, OR 97124 (Address of principal executive offices, including zip code) (503) 615-1100 (Registrant's telephone number, including area code) ------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / / Number of shares of common stock outstanding as of May 10, 2000 was 16,864,767. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- RADISYS CORPORATION PART I. FINANCIAL INFORMATION
PAGE NO. -------- Item 1. Consolidated Financial Statements Consolidated Balance Sheet--March 31, 2000 and December 31, 1999...................................................... 3 Consolidated Statement of Operations--Three months ended March 31, 2000 and 1999................................... 4 Consolidated Statement of Changes In Shareholders' Equity-- December 31, 1999 through March 31, 2000.................. 5 Consolidated Statement of Cash Flows--Three months ended March 31, 2000 and 1999................................... 6 Notes to Consolidated Financial Statements.................. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................................... 12 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K............................ 16 Signatures.......................................................................... 17
2 RADISYS CORPORATION CONSOLIDATED BALANCE SHEET (IN THOUSANDS) (UNAUDITED)
MARCH 31, DECEMBER 31, 2000 1999 --------- ------------- ASSETS Current assets Cash and cash equivalents............................... $ 36,013 $ 15,708 Accounts receivable, net................................ 61,051 58,619 Inventories, net........................................ 42,024 41,374 Other current assets.................................... 4,204 1,747 Deferred income taxes................................... 3,814 4,723 -------- -------- Total current assets.................................. 147,106 122,171 Property and equipment, net............................. 20,949 21,211 Goodwill and intangible assets, net..................... 33,466 34,177 Other assets............................................ 12,772 10,004 -------- -------- Total assets.......................................... $214,293 $187,563 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable........................................ $ 30,354 $ 19,878 Short term borrowings................................... 13,931 13,931 Income taxes payable.................................... 5,973 3,527 Accrued wages and bonuses............................... 6,254 6,706 Other accrued liabilities............................... 8,842 9,266 -------- -------- Total liabilities..................................... 65,354 53,308 -------- -------- Shareholders' equity Common stock, 50,000 shares authorized, 16,853 and 16,489 shares issued and outstanding.................. 146,307 141,030 Accumulated other comprehensive income (loss): Cumulative translation adjustment..................... (1,195) (1,546) Unrealized gain (loss) on securities available for sale................................................ 2,076 (349) Accumulated earnings (deficit).......................... 1,751 (4,880) -------- -------- Total shareholders' equity............................ 148,939 134,255 -------- -------- Total liabilities and shareholders' equity............ $214,293 $187,563 ======== ========
The accompanying notes are an integral part of this statement. 3 RADISYS CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
THREE MONTHS ENDED ------------------------- MARCH 31, DECEMBER 31, 2000 1999 --------- ------------- (RESTATED) Revenues.................................................... $81,293 $52,698 Cost of goods sold.......................................... 52,435 33,859 ------- ------- Gross profit................................................ 28,858 18,839 Research and development.................................... 8,981 6,662 Selling, general and administrative......................... 9,542 8,505 Goodwill and intangibles amortization....................... 1,724 299 ------- ------- Income from operations...................................... 8,611 3,373 Interest income (expense), net.............................. (56) 438 Other income................................................ 838 38 ------- ------- Income before income tax provision.......................... 9,393 3,849 Income tax provision........................................ 2,762 932 ------- ------- Net income.................................................. $ 6,631 $ 2,917 ======= ======= Net income per share (basic)................................ $ 0.40 $ 0.18 ======= ======= Net income per share (diluted).............................. $ 0.36 $ 0.18 ======= =======
The accompanying notes are an integral part of this statement. 4 RADISYS CORPORATION CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (IN THOUSANDS) (UNAUDITED)
COMMON STOCK CUMULATIVE UNREALIZED ACCUMULATED TOTAL OTHER ------------------- TRANSLATION GAIN/(LOSS) EARNINGS COMPREHENSIVE SHARES AMOUNT ADJUSTMENT ON SECURITIES (DEFICIT) TOTAL INCOME -------- -------- ----------- ------------- ----------- -------- ------------- Balances, December 31, 1999...................... 16,489 $141,030 $ (1,546) $ (349) $ (4,880) $134,255 Shares issued pursuant to benefit plans............. 364 5,277 5,277 Translation adjustment...... 351 351 $ 351 Unrealized gain on securities................ 2,425 2,425 2,425 Net income for the period... 6,631 6,631 6,631 ------ -------- -------- ------- -------- -------- ------ Balances, March 31, 2000.... 16,853 $146,307 $ (1,195) $ 2,076 $ 1,751 $148,939 ====== ======== ======== ======= ======== ======== Total other comprehensive income, three months ended March 31, 2000............ $9,407 ======
The accompanying notes are an integral part of this statement. 5 RADISYS CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
THREE MONTHS ENDED ----------------------- MARCH 31, MARCH 31, 2000 1999 ---------- ---------- (RESTATED) Cash flows from operating activities: Net income................................................ $ 6,631 $ 2,917 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization........................... 4,339 2,024 Gain on sale of assets.................................. (856) -- Deferred income taxes................................... 1,090 (609) Net changes in current assets and current liabilities: Decrease (increase) in accounts receivable............ (2,432) (4,722) Decrease (increase) in inventories.................... (650) 107 Decrease (increase) in other current assets........... (2,457) 97 Increase (decrease) in accounts payable............... 10,476 4,268 Increase (decrease) in income taxes payable........... 2,446 1,277 Increase (decrease) in accrued wages and bonuses...... (452) 289 Increase (decrease) in other accrued liabilities...... (377) (170) ------- ------- Net cash provided by operating activities............... 17,758 5,478 ------- ------- Cash flows from investing activities: Business acquisitions..................................... (962) (27,513) Capital expenditures...................................... (1,597) (1,483) Capitalized software production costs and other assets.... (825) (903) Sale of assets............................................ 350 -- ------- ------- Net cash used for investing activities.................. (3,034) (29,899) ------- ------- Cash flows from financing activities: Issuance of common stock, net............................. 5,277 943 Payments on capital lease obligation...................... (47) (84) ------- ------- Net cash provided by financing activities............... 5,230 859 ------- ------- Effect of exchange rate changes on cash..................... 351 (115) ------- ------- Net increase/(decrease) in cash and cash equivalents........ 20,305 (23,677) Cash and cash equivalents, beginning of period.............. 15,708 43,792 ------- ------- Cash and cash equivalents, end of period.................... $36,013 $20,115 ======= =======
The accompanying notes are an integral part of this statement. 6 RADISYS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS, EXCEPT SHARE AMOUNTS) (UNAUDITED) MARCH 31, 2000 1. BASIS OF PRESENTATION RadiSys Corporation (the Company) was incorporated in March 1987 under the laws of the State of Oregon for the purpose of developing, producing and marketing computer system (hardware and software) products for embedded computer applications in manufacturing automation, medical, transportation, telecommunications and test equipment marketplaces. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, which are located in Western Europe, Israel, and Japan. The accompanying consolidated financial statements are unaudited and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission and in the opinion of management include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of results for the interim periods. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1999. The results of operations for interim periods are not necessarily indicative of the results for the entire year. MANAGEMENT ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates and judgements made by management of the Company include matters such as collectibility of accounts receivable, realizability of inventories and recoverability of capitalized software and deferred tax assets. NEW PRONOUNCEMENTS In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition," which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements filed with the SEC. SAB 101 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosures related to revenue recognition policies. Management believes that the impact of SAB 101 has no material effect on the financial position or results of operations of the Company. RECLASSIFICATIONS Reclassifications have been made to certain amounts in prior years. These changes had no impact on previously reported results of operations or shareholders' equity. CASH FLOWS Non cash investing and financing activities include an increase in the market value of the General Automation stock, a net increase of $2.4 million to both Other long term assets and Unrealized gain on securities available for sale. 7 RADISYS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS) (UNAUDITED) MARCH 31, 2000 2. ACCOUNTS RECEIVABLE Trade accounts receivable are net of an allowance for doubtful accounts of $944 and $933 at March 31, 2000 and December 31, 1999, respectively. The Company's customers are concentrated in the technology industry. 3. INVENTORIES Inventories consist of the following:
MAR 31, DEC 31, 2000 1999 -------- -------- Raw materials............................................. $32,503 $30,986 Work in process........................................... 2,614 2,465 Finished goods............................................ 6,907 7,923 ------- ------- $42,024 $41,374 ======= =======
4. PROPERTY AND EQUIPMENT Property and equipment consists of the following:
MAR 31, DEC 31, 2000 1999 -------- -------- Land...................................................... $ 1,391 $ 1,391 Manufacturing equipment................................... 18,297 17,950 Office equipment.......................................... 20,733 19,746 Leasehold improvements.................................... 4,855 4,835 ------- ------- 45,276 43,922 Less: accumulated depreciation............................ 24,327 22,711 ------- ------- $20,949 $21,211 ======= =======
5. GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets decreased by $.7 million, net from $34.2 million at December 31, 1999 to $33.5 million at March 31, 2000. Goodwill and intangibles increased by $1.0 million resulting from increased purchase price recorded for the OCP acquisition based upon a formula tied to certain OCP revenues pursuant to the acquisition agreement. This increase was offset by $1.7 million in amortization of goodwill and other intangible assets. Amortization periods range from five to fifteen years. 6. EARNINGS PER SHARE Net income per share is based on the weighted average number of shares of common stock and common stock equivalents (stock options and warrants) outstanding during the periods, computed using the treasury stock method for stock options and warrants. 8 RADISYS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS) (UNAUDITED) MARCH 31, 2000 6. EARNINGS PER SHARE (CONTINUED) Weighted average shares consist of the following:
THREE MONTHS ENDED --------------------- MAR 31, MAR 31, 2000 1999 --------- --------- Weighted average shares (basic)........................... 16,670 15,903 Effect of dilutive stock options.......................... 1,534 677 ------- ------- Weighted average shares (diluted)......................... 18,204 16,580 ======= =======
7. SEGMENT INFORMATION The Company is organized primarily on the basis of embedded single board computers and other related support operations. Operations not included in embedded single board computers are insignificant for presentation. Information about the Company's geographic operations and sales is as follows:
THREE MONTHS ENDED ------------------- MAR 31, MAR 31, 2000 1999 REVENUE -------- -------- COUNTRY United States............................................. $46,301 $37,144 Europe.................................................... 32,702 14,163 Asia Pacific--Japan....................................... 1,818 664 Other foreign............................................. 472 727 ------- ------- $81,293 $52,698 ======= =======
MAR 31, MAR 31, 2000 1999 LONG LIVED ASSETS -------- -------- COUNTRY United States............................................. $20,154 $20,537 Europe.................................................... 721 591 Asia Pacific--Japan....................................... 74 83 ------- ------- $20,949 $21,211 ======= =======
One customer accounted for $11.7 million, or 14.4%, of total revenue for the three months ended March 31, 2000. No other customers accounted for more than 10% of total revenue for the three month period ended March 31, 2000. 9 RADISYS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS) (UNAUDITED) MARCH 31, 2000 8. MERGER WITH TEXAS MICRO AND RELATED CHARGES In connection with the merger of Texas Micro, Inc. on August 13, 1999, the Company recorded a charge to operating expenses of approximately $6.0 million for merger-related costs during 1999. Merger and related costs are comprised of the following:
COMBINATION COSTS BALANCE RECORDED YEAR ACCRUED AS OF ENDED DEC 31, 1999 MAR 31, 2000 ------------------- ------------- Professional & filing fees...................... $3,251 $ 91 Severance, retention, relocation & benefits alignment..................................... 1,538 450 Contract termination costs...................... 799 140 Marketing, information systems conversion, and other miscellaneous costs..................... 383 24 ------ ---- Total........................................... $5,971 $705 ====== ====
Accrued combination costs totaling $705 at March 31, 2000 are included in Other accrued liabilities in the Consolidated Balance Sheet. 9. GAIN ON SALE OF ASSETS During the first quarter of 2000 the Company sold a total of 367 shares of General Automation common stock resulting in a recorded net gain of $856. This gain is reflected in Other income in the Consolidated Statement of Operations. 10. ACQUISITIONS AND MERGERS ARTIC BUSINESS UNIT ACQUISITION On March 1, 1999, the Company purchased certain assets of International Business Machines Corporation ("IBM") dedicated to the design, manufacture and sale of IBM's ARTIC communications coprocessor adapter hardware and software for wide area network and other telephony applications ("ARTIC"). The purchase price aggregated $27.0 million in cash consideration. The acquisition of ARTIC was accounted for using the purchase method. The results of operations for ARTIC have been included in the financial statements since the date of acquisition. The aggregate purchase price of $27.5 million included $.6 million of direct costs of acquisition and was allocated to fixed assets ($.4 million), inventories ($6.5 million), patents ($5.0 million) and the remainder to goodwill. OCP BUSINESS UNIT ACQUISITION On December 28, 1999, the Company purchased certain assets of IBM's Open Computing Platform (OCP) operation. OCP develops and sells integrated computer-based solutions based on Intel architecture, primarily to OEM's of telecommunications equipment. The purchase price consisted of an aggregate of $13.9 million in cash consideration. The acquisition of OCP was accounted for using the purchase method. The results of operations of OCP have been included in the financial statements since the date of acquisition. The aggregate purchase price recorded as of December 31, 1999 of $14.1 million included $.1 million direct costs of acquisition and $.1 million of contingent consideration and was allocated to fixed assets ($.2 million), inventories ($.9 million) and the remainder to goodwill. 10 RADISYS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS) (UNAUDITED) MARCH 31, 2000 10. ACQUISITIONS AND MERGERS (CONTINUED) Pursuant to the terms of this agreement, the Company may be required to make additional future payments in March of 2001, 2002, and 2003 based upon a formula tied to future OCP revenues. Accordingly, during Q1 of 2000 the Company recorded an additional $1 million in purchase price resulting from OCP revenues during the quarter. The additional purchase price has been recorded as goodwill. The total consideration for the acquisition is limited to $30.0 million. UNAUDITED PRO FORMA DISCLOSURES OF ACQUISITIONS The following unaudited pro forma information presents the results of operations of the Company as if the acquisitions described above had occurred as of the beginning of 1999, after giving effect to adjustments of amortization of patents and goodwill, estimated reduction of interest income and the estimated impact on the income tax provision. The unaudited pro forma financial statements are not necessarily indicative of what actual results would have been had the ARTIC and OCP acquisitions occurred at the beginning of the respective period. The unaudited pro forma information should be read in conjunction with the Current Report of the Company on Form 8-K dated March 1, 1999 and December 28, 1999 for ARTIC and OCP, respectively, and the Current Reports of the Company on Form 8-K/A filed April 22, 1999 and March 10, 2000, respectively.
THREE MONTHS ENDED MAR 31, 1999 ------------------ (UNAUDITED) Revenues................................................... $75,407 Net income................................................. 6,229 Net income per share (basic)............................... .39 Net income per share (diluted)............................. .38
11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (in thousands) OVERVIEW Total revenue was $81.3 million for the three months ended March 31, 2000 compared to $52.7 million for the three months ended March 31, 1999. Net income was $6.6 million for the three months ended March 31, 2000 compared to $2.9 million for the three months ended March 31, 1999. During the past year, the Company has merged with one company (Texas Micro in August 1999) and acquired assets in two other transactions (ARTIC in March 1999 and OCP in late December 1999) in order to expand the expertise the Company believes it needs to compete effectively in the communications market. These acquisitions have resulted in increased sales volume as well as increased operating and manufacturing capacity. Additionally, the merger with Texas Micro has resulted in certain operating efficiencies. Therefore, total operating expenses have increased in dollar volume but efficiencies combined with increased sales volume have resulted in a decrease of operating expenses as a percentage of revenue. The Company expects to continue to acquire companies and technologies that are complementary to the Company's business and product offerings. REVENUES
THREE MONTHS ENDED ---------------------------------------- MARCH 31, PERCENTAGE MARCH 31, 2000 CHANGE 1999 --------- ---------- --------- (IN THOUSANDS, EXCEPT PERCENTAGE AMOUNTS) Revenues.................................................... $81,293 54% $52,698
Revenues increased by $28.6 million or 54% for the three months ended March 31, 2000 compared to the three months ended March 31, 1999. The increase in revenues is due to growth within existing product lines and movement into higher growth markets, primarily telecommunications. In addition, revenue in the three months ended March 31, 2000 includes revenues from the Company's 1999 acquisitions (ARTIC in March 1999 and OCP in late December 1999) for the entire quarter. The Company's top five customers collectively represented approximately 36% of revenue for the three months ended March 31, 2000. COST OF GOODS SOLD
THREE MONTHS ENDED ---------------------------------------- MARCH 31, PERCENTAGE MARCH 31, 2000 CHANGE 1999 --------- ---------- --------- (IN THOUSANDS, EXCEPT PERCENTAGE AMOUNTS) Cost of goods sold.......................................... $52,435 55% $33,859 As a percentage of revenues................................. 65% 64%
Cost of goods sold increased by $18.6 million or 55% for the three months ended March 31, 2000 compared to the three months ended March 31, 1999 primarily as a result of increased revenues. The slight increase in cost of goods sold in the three months ended March 31, 2000 as a percentage of revenues is due to the impact of product mix. 12 RESEARCH AND DEVELOPMENT
THREE MONTHS ENDED ---------------------------------- MARCH 31, PERCENTAGE MARCH 31, 2000 CHANGE 1999 --------- ---------- --------- (IN THOUSANDS, EXCEPT PERCENTAGE AMOUNTS) Research and development.................................... $8,981 35% $6,662 As a percentage of revenues................................. 11% 13%
Although overall research and development expenses have increased, they have declined by almost 2% as a percentage of revenue for the three months ended March 31, 2000 compared to the three months ended March 31, 1999. This percentage decline can be attributed to increased efficiencies as a result of the integration of Texas Micro. In addition, the impact of the OCP acquisition resulted in lower research and development costs as a percentage of revenues, because OCP's business model incorporated lower R&D expenses as a percentage of revenues. SELLING, GENERAL AND ADMINISTRATIVE
THREE MONTHS ENDED ---------------------------------- MARCH 31, PERCENTAGE MARCH 31, 2000 CHANGE 1999 --------- ---------- --------- (IN THOUSANDS, EXCEPT PERCENTAGE AMOUNTS) Selling, general & administrative........................... $9,542 12% $8,505 As a percentage of revenues................................. 12% 16%
Selling, general and administrative (SG&A) expenses as a percentage of revenues have declined by 4% for the three months ended March 31, 2000 compared to the three months ended March 31, 1999. The decline is largely a result of the integration of Texas Micro into the Company. For example, the Company experienced significant savings by combining the sales organizations and eliminating manufacturing representatives in the Texas Micro model. In addition, the OCP acquisition resulted in lower SG&A expenses, as OCP's business model incorporated lower SG&A expenses as a percentage of revenues. GOODWILL AND INTANGIBLES AMORTIZATION
THREE MONTHS ENDED ---------------------------------- MARCH 31, PERCENTAGE MARCH 31, 2000 CHANGE 1999 --------- ---------- --------- (IN THOUSANDS, EXCEPT PERCENTAGE AMOUNTS) Goodwill and intangibles amortization....................... $1,724 477% $299 As a percentage of revenues................................. 2% 1%
Goodwill amortization expense increased by $1.4 million for the three months ended March 31, 2000 compared to the three months ended March 31, 1999. This is a result of the ARTIC acquisition in March 1999 and the OCP acquisition in December 1999. Amortization of these amounts commenced in the three months ended March 31, 1999 and the three months ended March 31, 2000, respectively. Amortization periods for goodwill and intangibles range from five to fifteen years. 13 INTEREST INCOME, NET, OTHER INCOME, NET AND INCOME TAX PROVISION
THREE MONTHS ENDED ---------------------------------- MARCH 31, PERCENTAGE MARCH 31, 2000 CHANGE 1999 --------- ---------- --------- (IN THOUSANDS, EXCEPT PERCENTAGE AMOUNTS) Interest income, net........................................ $ (56) (113%) $438 Other income, net........................................... $ 838 2,105% $ 38 Income tax provision........................................ $2,762 196% $932
Interest income, net decreased $494 for the three months ended March 31, 2000 compared to the three months ended March 31, 1999. This decrease is primarily due to the lower cash and cash equivalents levels resulting from the funding of the ARTIC Business Unit acquisition on March 1, 1999 and increased interest expense as a result of the $13.9 million line of credit outstanding during the three months ended March 31, 2000 at an interest rate of 8.5%. Other income, net increased by $800 for the three months ended March 31, 2000 compared to the three months ended March 31, 1999. This increase is primarily due to the sale of 367 shares of General Automation common stock, which resulted in a recorded gain of $856. The increase in the income tax provision is attributable to increased net income before taxes of $5.5 million for the three months ended March 31, 2000 compared to the three months ended March 31, 1999. The effective income tax rate for Q1 2000 was 29.4% compared to 24.2% for the three months ended March 31, 1999. The 5.2% increase in the effective tax rate is primarily due to limitations on the usage of the Texas Micro net operating loss for the three months ended March 31, 2000 as result of the merger with Texas Micro on August 13, 1999. LIQUIDITY AND CAPITAL RESOURCES As of March 31, 2000, the Company had $36.0 million in cash and cash equivalents and working capital of approximately $81.8 million. The Company has a $20.0 million line of credit with a bank which expires September, 2000. As of March 31, 2000, $13.9 million was outstanding under this arrangement at an interest rate of 8.5%. Amounts outstanding under the line of credit accrue interest at an annual rate equal to the lower of the LIBOR plus 1.25% to 2.0% or lender's prime rate (9% at March 31, 2000). Cash and cash equivalents increased by $20.3 million during Q1 2000, and decreased by $23.7 in Q1 1999. Activities impacting cash and cash equivalents are as follows:
THREE MONTHS ENDED ------------------- MAR 31, MAR 31, 2000 1999 -------- -------- Cash provided by operating activities....................... $17.8 $ 5.4 Cash used for investing activities.......................... (3.0) (29.9) Cash provided by financing activities....................... 5.2 .9 Effect of exchange rate changes on cash..................... .3 (.1) ----- ------ Net increase (decrease)..................................... $20.3 ($23.7) ===== ======
In addition to net income of $6.6 million plus depreciation and amortization of $4.3 million, significant changes in balance sheet accounts contributing to the increase in cash from operations for Q1 of 2000 included an increase in accounts payable of $10.5 million, partially offset by an increase in accounts receivable of $2.4 million. Significant investing and financing activities impacting cash included $2.4 million in capital expenditures and capital software additions, and $5.3 million in common stock issuances. Capital expenditures were primarily for the purchase of furniture and office equipment, 14 computer hardware, manufacturing and engineering equipment, and the implementation of SAP financial applications. Capital expenditures for 2000 are expected to range from $7.0 million to $9.0 million, resulting in part from the Company's plan to continue increasing its manufacturing capacities and investments in information systems. In Q1 1999 investing activities primarily consisted of the ARTIC acquisition of $27.5 million. The Company believes its existing cash and cash equivalents and cash from operations will be sufficient to fund its current operations for at least the next 12 months. Because the Company's capital requirements cannot be predicted with certainty, there is no assurance that the Company will not require additional financing before the expiration of 12 months. FORWARD-LOOKING STATEMENTS Statements and information in this Quarterly Report on Form 10-Q and the statements the Company's management may make, from time to time concerning the Company's future liquidity, development, business activities, potential acquisitions and capital expenditures constitute forward-looking statements that involve a number of risks and uncertainties. The following are among the factors that could cause actual results to differ materially: - dependence on the relationship with Intel Corporation and its products; - lower than expected sales in the communications market; - lower than expected design wins with key OEMS; - failure of leading OEMs to incorporate the Company's solutions in successful products; - deliveries of products containing errors, defects and bugs; - dependence on a limited number of suppliers or, in some cases, one supplier for components and equipment used to manufacture products; - difficulties in integrating acquired businesses and assets, including Texas Micro; - competition in the embedded computer market, which may lead to pricing pressures; - political, economic and regulatory risks associated with international operations; - technological developments; - the inability to protect the Company's intellectual property or successfully to defend against infringement claims by others; - availability of qualified personnel; - business conditions in the general economy and in the markets the Company serves; and - technological difficulties and resource constraints encountered in developing new products. The forward-looking statements should be considered in light of these factors. 15 PART II OTHER INFORMATION Item 6. Exhibits (a) Exhibits 10.1 Executive Severance Agreement dated February 8, 2000 between the Company and Glenford J. Myers. 27 Financial Data Schedule (b) Reports on Form 8-K On January 11, 2000, the Company filed a Form 8-K dated December 28, 1999 reporting Item 2. On March 13, 2000, the Company filed an amendment to such Form 8-K to provide financial statements in connection with the business acquired by the Company on December 28, 1999.
16 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: May 12, 2000 RADISYS CORPORATION By: ----------------------------------------- Stephen F. Loughlin VICE PRESIDENT OF FINANCE AND ADMINISTRATION AND CHIEF FINANCIAL OFFICER (AUTHORIZED OFFICER AND PRINCIPAL FINANCIAL OFFICER)
17 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - --------------------- ----------- 10.1 Executive Severance Agreement dated February 8, 2000 between the Company and Glenford J. Myers. 27 Financial Data Schedule
18 EX-10.1 2 EXHIBIT 10.1 EXECUTIVE SEVERANCE AGREEMENT February 8, 2000 Glenford J. Myers 3260 NW 112th Place Portland, Oregon 97229 EXECUTIVE RadiSys Corporation an Oregon corporation 5445 NE Dawson Creek Parkway Hillsboro, Oregon 97124 THE COMPANY
1. EMPLOYMENT RELATIONSHIP. Executive is currently employed by the Company as President and Chief Executive Officer. Executive also is currently Chairman of the Board of Directors. Executive and the Company acknowledge that either party may terminate this employment relationship at any time and for any or no reason, provided that each party complies with the terms of this Agreement. 2. RELEASE OF CLAIMS. In consideration for and as a condition precedent to receiving the severance benefits outlined in this Agreement, Executive agrees to execute a Release of Claims in the form attached as EXHIBIT A ("Release of Claims"). Executive promises to execute and deliver the Release of Claims to the Company within the later of (a) 45 days from the date Executive receives the Release of Claims or (b) the last day of Executive's active employment. 3. ADDITIONAL COMPENSATION UPON CERTAIN TERMINATION EVENTS. 3.1 GENERAL. In the event of a Termination of Executive's Employment (as defined in Section 6.1 of this Agreement) other than for Cause (as defined in Section 6.2 of this Agreement), death, or Disability (as defined in Section 6.3 of this Agreement), or in the circumstances described in Section 3.2, and contingent upon Executive's execution of the Release of Claims and compliance with Section 8, Executive shall be entitled to the following benefits: (a) As severance pay and in lieu of any other compensation for periods subsequent to the date of termination, the Company shall pay Executive, in a single payment after employment has ended and eight days have passed following execution of the Release of Claims without revocation, an amount in cash equal to 12 months of Executive's annual base pay at the rate in effect immediately prior to the date of termination. (b) Executive is entitled to extend coverage under any group health plan in which Executive and Executive's dependents are enrolled at the time of termination of employment under the COBRA continuation laws for the 18-month statutory period, or so long as Executive remains eligible under COBRA. The Company will pay Executive a lump sum payment in an amount equivalent to the reasonably estimated cost Executive may incur to extend for a period of 12 months under the COBRA continuation laws Executive's group health and dental plan coverage in effect at the time of termination. Executive may use this payment, as well as any payment made under Section 3.1(a), for such COBRA continuation coverage or for any other purpose. (c) Executive will be entitled to receive an amount equal to a prorated portion of the Executive's target bonus amount under any cash incentive plans in effect at the time of a Termination of Executive's Employment. For example, if there is a target annual bonus amount and a target semi-annual bonus amount in place, the Executive will be entitled to receive a pro rata portion of the annual target bonus amount for the year in which the Termination occurred and a pro rata portion of the semi-annual target bonus amount for the six-month period in which the Termination occurred. The proration will be calculated based on the number of days in the applicable period divided by the number of days the Executive was employed in the applicable period up to and including the date of the Termination of Executive's Employment. The amount payable pursuant to this section shall be paid on the same date that the Section 3.1(a) payment is payable. (d) All stock options granted to the Executive under the Company's 1995 Stock Incentive Plan or any other equity plan that would vest during the 12-month period following the date of Termination shall become immediately exercisable in full in accordance with the applicable provisions of the relevant option agreement and plan. 3.2. CHANGE OF CONTROL. In the event of a Termination of Executive's Employment (including solely for this Section 3.2 a termination by the Executive for Good Reason as defined in Section 6.1) other than for Cause, death or Disability, within 18 months following a Change of Control (as defined in Section 6.4 of this Agreement) and contingent upon Executive's execution of the Release of Claims and compliance with Section 8, Executive shall be entitled to the following benefits in lieu of and not in addition to the benefits described in Section 3.1: (a) As severance pay and in lieu of any other compensation for periods subsequent to the date of termination, the Company shall pay Executive, in a single payment after employment has ended and eight days have passed following execution of the Release of Claims without revocation, an amount in cash equal to 24 months of Executive's annual base pay at the rate in effect immediately prior to the date of termination. (b) Executive is entitled to extend coverage under any group health plan in which Executive and Executive "s dependents are enrolled at the time of termination of employment under the COBRA continuation laws for the 18-month statutory period, or so long as Executive remains eligible under COBRA. The Company will pay Executive a lump sum 2 payment in an amount equivalent to the reasonably estimated cost Executive may incur to extend for a period of 24 months under the COBRA continuation laws Executive's group health and dental plan coverage in effect at the time of termination. Executive may use this payment, as well as any payment made under Section 3.2(a), for such COBRA continuation coverage or for any other purpose. Executive will be entitled to receive an amount equal to the Executive's full target bonus amount for the year and any partial year period in which the Termination occurred under any cash incentive plans in effect at the time of a Termination of Executive's Employment. For example, if there is a target annual bonus amount and a target semi-annual bonus amount in place, the Executive will be entitled to receive the full annual target bonus amount for the year in which the Termination occurred and the full semi-annual target bonus amount for the six-month period in which the Termination occurred. The amount payable pursuant to this section shall be paid on the same date that the Section 3.2(a) payment is payable. (d) All stock options granted to the Executive under the Company's 1995 Stock Incentive Plan or any other equity plan shall become immediately exercisable in full in accordance with the applicable provisions of the relevant option agreement and plan. 3.3 Notwithstanding the foregoing, if the total payments and benefits to be paid to or for the benefit of Executive under this Agreement would cause any portion of those payments and benefits to be "parachute payments" as defined in section 280G(b)(2) of the Internal Revenue Code of 1986, as amended, or any successor provision, the total payments and benefits to be paid to or for the benefit of Executive under this Agreement shall be reduced to an amount that would not cause any portion of those payments and benefits to constitute "parachute payments." 4. WITHHOLDING; SUBSEQUENT EMPLOYMENT. 4.1 WITHHOLDING. All payments provided for in this Agreement are subject to applicable withholding obligations imposed by federal, state and local laws and regulations. 4.2 OFFSET. The amount of any payment provided for in this Agreement shall not be reduced, offset or subject to recovery by the Company by reason of any compensation earned by Executive as the result of employment by another employer after termination. 5. OTHER AGREEMENTS. If that severance benefits are payable to Executive under any other agreement with the Company in effect at the time of termination (including but not limited to any employment agreement, but excluding for this purpose any stock option agreement that may provide for accelerated vesting or related benefits upon the occurrence of a change in control), the benefits provided in this Agreement shall not be payable to Executive. Executive may, however, elect to receive all of the benefits provided for in this Agreement in lieu of all of the benefits provided in all such other agreements. Any such election shall be 3 made with respect to the agreements as a whole, and Executive cannot select some benefits from one agreement and other benefits from this Agreement. 6. DEFINITIONS. 6.1 TERMINATION OF EXECUTIVE'S EMPLOYMENT. For the purposes of Section 3.1, Termination of Executive's Employment means that the Company has terminated Executive's employment with the Company (including any subsidiary of the Company). Solely for purposes of Section 3.2, Termination of Executive's Employment shall include termination by Executive by written notice to the Company also for "Good Reason" based on: (a) a significant reduction by the Company or the surviving company in Executive's base pay as in effect immediately prior to the Change of Control, other than a salary reduction that is part of a general salary reduction affecting employees generally: (b) a significant reduction by the Company or the surviving company in total benefits available to Executive under cash incentive, stock incentive and other employee benefit plans after the Change of Control compared to the total package of such benefits as in effect prior to the Change of Control; (c) The Company or the surviving company requires Executive to be based more than 50 miles from where Executive's office is located immediately prior to the Change of Control except for required travel on company business to an extent substantially consistent with the business travel obligations which Executive undertook on behalf of the Company prior to the Change of Control; or (d) The assignment of Executive to a different title, job or responsibilities that results in a material decrease in the level of responsibility of Executive with respect to the surviving company after the Change of Control when compared to Executive's level of responsibility for the Company's operations prior to the Change of Control; PROVIDED, that Good Reason shall not exist if Executive continues to have substantially the same or a greater general level of responsibility with respect to the former operations of the Company after the Change of Control as Executive had prior to the Change of Control even if the former such operations are a subsidiary or division of the surviving company. 4 6.2 CAUSE. Termination of Executive's Employment for "Cause" shall mean termination upon (a) the willful and continued failure by Executive to perform substantially Executive's reasonably assigned duties with the Company (other than any such failure resulting from Executive's incapacity due to physical or mental illness) after a demand for substantial performance is delivered to Executive by the Board of Directors, the Chief Executive Officer or the President of the Company which specifically identifies the manner in which the Board of Directors or the Company believes that Executive has not substantially performed Executive's duties or (b) the willful engaging by Executive in illegal conduct which is materially and demonstrably injurious to the Company. No act, or failure to act, on Executive's part shall be considered "willful" unless done, or omitted to be done, by Executive without reasonable belief that Executive's action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board of Directors shall be conclusively presumed to be done, or omitted to be done, by Executive in the best interests of the Company. 6.3 CHANGE OF CONTROL. A Change of Control shall mean that one of the following events has taken place: (a) The shareholders of the Company approve one of the following: (i) Any merger or statutory plan of exchange involving the Company ("Merger") in which the Company is not the continuing or surviving corporation or pursuant to which Common Stock would be converted into cash, securities or other property, other than a Merger involving the Company in which the holders of Common Stock immediately prior to the Merger continue to represent more than 50 percent of the voting securities of the surviving corporation after the Merger; or (ii) Any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company. (b) A tender or exchange offer, other than one made by the Company, is made for Common Stock (or securities convertible into Common Stock) and such offer results in a portion of those securities being purchased and the offer or after the consummation of the offer is the beneficial owner (as determined pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), directly or indirectly, of securities representing more than 50 percent of the voting power of outstanding securities of the Company. 5 (c) The Company receives a report on Schedule 13D of the Exchange Act reporting the beneficial ownership by any person of securities representing more than 50 percent of the voting power of outstanding securities of the Company, except that if such receipt shall occur during a tender offer or exchange offer described in (b) above, a Change of Control shall not take place until the conclusion of such offer. Notwithstanding anything in the foregoing to the contrary, no Change of Control shall be deemed to have occurred for purposes of this Agreement by virtue of any transaction which results in Executive, or a group of persons which includes Executive, acquiring, directly or indirectly, securities representing 20 percent or more of the voting power of outstanding securities of the Company. 6.4 DISABILITY. "Disability" means Executive's absence from Executive's full-time duties with the Company for 180 consecutive days as a result of Executive's incapacity due to physical or mental illness, unless within 30 days after notice of termination by the Company following such absence Executive shall have returned to the full-time performance of Executive's duties. This Agreement does not apply if the Executive is terminated due to Disability. 7. SUCCESSORS; BINDING AGREEMENT. This Agreement shall be binding on and inure to the benefit of the Company and its successors and assigns. This Agreement shall inure to the benefit of and be enforceable by Executive and Executive's legal representatives, executors, administrators and heirs. 8. RESIGNATION OF CORPORATE OFFICES; REASONABLE ASSISTANCE. Executive will resign Executive's office, if any, as a director, officer or trustee of the Company, its subsidiaries or affiliates and of any other corporation or trust of which Executive serves as such at the request of the Company, effective as of the date of termination of employment. Executive further agrees that, if requested by the Company or the surviving company following a Change of Control, Executive will continue his employment with the Company or the surviving company for a period of up to six months following the Change of Control in any capacity requested, consistent with Executive's area of expertise, provided that the Executive receives the same salary and substantially the same benefits as in effect prior to the Change of Control. Executive agrees to provide the Company such written resignation(s) and assistance upon request and that no severance will be paid until after such resignation(s) or services are provided. 9. GOVERNING LAW. This Agreement shall be construed in accordance with and governed by the laws of the State of Oregon 10. AMENDMENT. No provision of this Agreement may be modified unless such modification is agreed to in a writing signed by Executive and the Company. 6 11. SEVERABILITY. If any of the provisions or terms of this Agreement shall for any reason be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other terms of this Agreement, and this Agreement shall be construed as if such unenforceable term had never been contained in this Agreement. RADISYS CORPORATION By: /s/ DIANE M. WILLIAMS GLENFORD J. MYERS 2-24-2000 --------------------------- ------------------------------------ Diane Williams 2-28-00 Glenford J. Myers VICE PRESIDENT
7 EXHIBIT A RELEASE OF CLAIMS 1. PARTIES. The parties to Release of Claims (hereinafter "Release") are Glenford J. Myers and RadiSys Corporation, an Oregon corporation, as hereinafter defined. 1.1 EXECUTIVE. For the purposes of this Release, "Executive" Glenford J. Myers and his or her attorneys, heirs, executors, administrators, assigns, and spouse. 1.2 THE COMPANY. For purposes of this Release the "Company" means RadiSys Corporation, an Oregon corporation, its predecessors and successors, corporate affiliates, and all of each corporation's officers, directors, employees, insurers, agents, or assigns, in their individual and representative capacities. 2. BACKGROUND AND PURPOSE. Executive was employed by Company. Executive's employment is ending effective __________ under the conditions described in Section [3.1] [3.2] of the Executive Severance Agreement ("Agreement"). The purpose of this Release is to settle, and the parties hereby settle, fully and finally, any and all claims Executive may have against Company, whether asserted or not, known or unknown, including, but not limited to, claims arising out of or related to Executive's employment, any claim for reemployment, or any other claims whether asserted or not, known or unknown, past or future, that relate to Executive's employment, reemployment, or application for reemployment. 3. RELEASE. Executive waives, acquits and forever discharges Company from any obligations Company has and all claims Executive may have including but not limited to obligations and/or claims arising from the Agreement or any other document or oral agreement relating to employment compensation, benefits severance or post-employment issues. Executive hereby releases Company from any and all claims, demands, actions, or causes of action, whether known or unknown, arising from or related in any way to any employment of or past or future failure or refusal to employ Executive by Company, or any other past or future claim (except A-1 as reserved by this Release or where expressly prohibited by law) that relates in any way to Executive's employment, compensation, benefits, reemployment, or application for employment, with the exception of any claim Executive may have against Company for enforcement of this Release. This release includes any and all claims, direct or indirect, which might otherwise be made under any applicable local, state or federal authority, including but not limited to any claim arising under the Oregon statutes dealing with employment, discrimination in employment, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Family and Medical Leave Act of 1993, the Equal Pay Act of 1963, Executive Order 11246, the Rehabilitation Act of 1973, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Age Discrimination in Employment Act, the Fair Labor Standards Act, Oregon wage and hour statutes, all as amended, any regulations under such authorities, and any applicable contract, tort, or common law theories. 3.1 RESERVATIONS OF RIGHTS. This Release shall not affect any rights which Executive may have under any medical insurance, disability plan, workers' compensation, unemployment compensation, applicable company stock incentive plan(s), indemnifications, or the 401(k) plan maintained by the Company. 3.2 NO ADMISSION OF LIABILITY. It is understood and agreed that the acts done and evidenced hereby and the release granted hereunder is not an admission of liability on the part of Executive or Company, by whom liability has been and is expressly denied. 4. CONSIDERATION TO EXECUTIVE. After receipt of this Release signed by Executive, and the expiration of the seven-day revocation period provided by the Older Workers Benefit Protection Act without Executive's revocation, Company shall pay the Executive the severance benefits as provided in Section [3.1] [3.2] of the Agreement. 5. NO DISPARAGEMENT. Executive agrees that henceforth Executive will not disparage or make false or adverse statements about Company. The Company should report to Executive any actions or statements that are attributed to Executive that the Company believes are disparaging. The Company may take actions consistent with breach of this Release should it determine that Executive has disparaged or made false or adverse statements about Company. The Company agrees to follow the applicable policy(ies) regarding release of employment reference information. A-2 6. CONFIDENTIALITY, PROPRIETARY, TRADE SECRET AND RELATED INFORMATION. Executive acknowledges the duty and agrees not to make unauthorized use or disclosure of any confidential, proprietary or trade secret information learned as an employee about Company, its products, customers and suppliers, and covenants not to breach that duty. Moreover, Executive acknowledges that, subject to the enforcement limitations of applicable law, the Company reserves the right to enforce the terms of Executive's Employee Agreement with Company and any paragraph(s) therein. Should Executive, Executive's attorney or agents be requested in any judicial, administrative, or other proceeding to disclose confidential, proprietary or trade secret information Executive learned as an employee of Company, Executive shall promptly notify the Company of such request by the most expeditious means in order to enable the Company to take any reasonable and appropriate action to limit such disclosure. 7. SCOPE OF RELEASE. The provisions of this Release shall be deemed to obligate, extend to, and inure to the benefit of the parties; Company's parents, subsidiaries, affiliates, successors, predecessors, assigns, directors, officers, and employees; and each parties insurers, transferees, grantees, legatees, agents and heirs, including those who may assume any and all of the above-described capacities subsequent to the execution and effective date of this Release. 8. OPPORTUNITY FOR ADVICE OF COUNSEL. Executive acknowledges that Executive has been encouraged to seek advice of counsel with respect to this Release and has had the opportunity to do so. 9. ENTIRE RELEASE. This Release and the Agreement signed by Executive contain the entire agreement and understanding between the parties and, except as reserved in paragraph 3, supersede and replace all prior agreements, written or oral, prior negotiations and proposed agreements, written or oral. Executive and Company acknowledge that no other party, nor agent nor attorney of any other party, has made any promise, representation, or warranty, express or implied, not contained in this Release concerning the subject matter of this Release to induce this Release, and Executive and Company acknowledge that they have not executed this Release in reliance upon any such promise, representation, or warranty not contained in this Release. 10. SEVERABILITY. A-3 Every provision of this Release is intended to be severable. In the event any term or provision of this Release is declared to be illegal or invalid for any reason whatsoever by a court of competent jurisdiction or by final and unappealed order of an administrative agency of competent jurisdiction, such illegality or invalidity should not affect the balance of the terms and provisions of this Release, which terms and provisions shall remain binding and enforceable. 11. PARTIES MAY ENFORCE RELEASE. Nothing in this Release shall operate to release or discharge any parties to this Release or their successors, assigns, legatees, heirs, or personal representatives from any rights, claims, or causes of action arising out of, relating to, or connected with a breach of any obligation of any party contained in this Release. 12. COSTS AND ATTORNEY'S FEES. In the event of any administrative or civil action to enforce the provisions of this Release, the Company shall pay Executive's reasonable attorneys' fees through trial and/or on appeal. 13. ACKNOWLEDGMENT. Executive acknowledges that the Release provides severance pay and benefits which the Company would otherwise have no obligation to provide. 14. REVOCATION. As provided by the Older Workers Benefit Protection Act, Executive's is entitled to have forty-five (45) days to consider this Release. For a period of seven (7) days from execution of this Release, Executive may revoke this Release. Upon receipt of Executive's signed Release and the end of the revocation period, payment by Company as described in paragraph 4 above will be forwarded by mail in a timely manner as provided herein. ____________________________ Dated:__________________ _____, ____ [Name of Executive]
A-4 STATE OF OREGON - ) ) ss. County of_________) Personally appeared the above named _____________________________ and acknowledged the foregoing instrument to be his or her voluntary act and deed. Before me: _______________________________________ Notary Public for______________________ My commission expires:_________________ COMPANY By:________________________________ Dated:_________________________________ Its:_______________________________ On Behalf of "Company"
A-5 EX-27 3 EXHIBIT 27
5 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 36,013 0 61,051 944 42,024 147,106 20,949 24,327 214,293 65,354 0 0 0 146,307 2,632 214,293 81,293 81,293 52,435 20,247 838 0 (56) 9,393 2,762 6,631 0 0 0 6,631 0.40 0.36
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