Announces Preliminary Fourth Quarter 2017
Revenue of Approximately $32 Million
Radisys Corporation (NASDAQ: RSYS), a global leader of open
telecom solutions, today announced the Company closed a $17 million
financing with Hale Capital Partners (“HCP”) and also entered into
a newly established $20 million asset-backed line of credit
agreement with Marquette Business Credit, a subsidiary of UMB Bank.
In conjunction with securing the new financing, the Company settled
all outstanding balances and terminated its previous line of credit
with Silicon Valley Bank.
“Securing this additional capital provides us with increased
flexibility, enabling us to more meaningfully focus on our Software
and Services business,” said Brian Bronson, Radisys President and
Chief Executive Officer. “Importantly, execution on our re-focused
business strategy will position Radisys to deliver non-GAAP gross
margins of over 40% and drive non-GAAP operating expenses below $40
million in 2018. Taken together, we expect these measures to result
in more consistent profitability and positive cash flow, while also
maintaining the capability to execute on growth opportunities
across the business.”
Martin Hale, Jr., CEO of HCP, commented, "We are excited to
become a strategic partner to Radisys. The Company is in a
favorable position to capitalize on the fundamental changes
underway in terms of how telecommunication networks are built.
Additionally, Radisys’ unique portfolio of telecom software and
services expertise can be a key enabler for communication service
providers implementing 5G and next-generation open source solutions
at the edge of the network. We look forward to working closely with
the Board and management team to create significant value for all
Radisys stakeholders."
The senior notes carry an interest rate of Prime plus 5.75%,
with amortization not scheduled to begin until August 2018. ROTH
Capital acted as placement agent and financial advisor to Radisys
on the transaction. Additional details and terms of the respective
agreements can be found in Form 8-K filed by the Company today with
the U.S. Securities and Exchange Commission at www.sec.gov.
Fourth Quarter Preliminary Revenue
For the fourth quarter ended December 31, 2017, the Company
anticipates revenue of approximately $32 million, exceeding the $31
million midpoint of its previously announced revenue guidance
range. The Company also expects to record a one-time inventory
charge of up to $11 million during the fourth quarter, largely
associated with DCEngine inventories. Additionally, the Company
anticipates recognizing restructuring charges of approximately $7
million through the second quarter of 2018, primarily associated
with employee severance obligations and non-cash asset
write-downs.
Radisys will report its complete fourth quarter 2017 results as
part of the Company’s quarterly earnings conference call, which is
currently scheduled for Thursday, February 8, 2018.
About Radisys
Radisys (NASDAQ: RSYS) helps communications and content
providers, and their strategic partners, create new revenue streams
and drive cost out of their services delivery infrastructure.
Radisys’ hyperscale software defined infrastructure, service aware
traffic distribution platforms, real-time media processing engines
and wireless access technologies enable its customers to maximize,
virtualize and monetize their networks. For more information about
Radisys, please visit www.radisys.com.
About Hale Capital Partners
HCP partners with talented entrepreneurs to achieve remarkable
corporate transformations. Whether providing equity or debt in
control or non-control situations, we serve as stewards for the
ideas of extraordinary leaders as they seek to accelerate growth in
public companies, divestitures, special situations and other lower
middle market companies. Founded in 2007, HCP's roadmap to success
centers on a program of transformation—financial, cultural, and
operational—developed from extensive academic work and two decades
of investment expertise. This critical intellectual property helps
our companies evolve, grow, and compete in an ever-shifting
marketplace.
Forward-Looking Statements
This press release contains forward-looking statements,
including statements about the Company's business strategy, changes
in reporting segments financial outlook and expectations for the
fourth quarter of 2017 and fiscal 2018, and statements related to
revenue and gross margins from our respective segments and product
lines, investments in future growth, expense savings or reductions,
increased profitability, product line focus, operational and
administrative efficiencies, revenue growth, margin improvement,
financial performance and other attributes of the Company. These
forward-looking statements are based on the Company's expectations
and assumptions, as of the date such statements are made, regarding
the Company's future operating performance and financial condition,
customer requirements, outcome of product trials, the economy and
other future events or circumstances. Actual results could differ
materially from the outlook guidance and expectations in these
forward-looking statements as a result of a number of risk factors,
including, among others, (a) increased Tier 1 commercial
deployments across multiple product lines, (b) continued
implementation of the Company’s next-generation products, (c)
effective implementation of the planned restructuring, (d) customer
implementation of traffic management solutions, (e) the outcome of
product trials, (f) the market success of customers' products and
solutions, (g) the development and transition of new products and
solutions, including the Company’s FlowEngine appliance,
MobilityEngine 5G RAN technology, MediaEngine Transcoding solutions
and professional services programs across the Company’s strategic
product lines, (h) the enhancement of existing products and
solutions to meet customer needs and respond to emerging
technological trends, (i) the Company’s ability to raise additional
growth capital, (j) the Company's dependence on certain customers
and high degree of customer concentration, (k) the Company's use of
one contract manufacturer for a significant portion of the
production of its products, including the success of transitioning
contract manufacturing partners, (l) matters affecting the telecom
and embedded product industries, including changes in industry
standards, changes in customer requirements and new product
introductions, (m) actions by regulatory authorities or other third
parties, (n) cash generation, (o) changes in tariff and trade
policies and other risks associated with foreign operations, (p)
fluctuations in currency exchange rates, (q) the ability of the
Company to successfully complete any future restructuring,
acquisition or divestiture activities, (r) risks relating to
fluctuations in the Company's operating results, the uncertainty of
revenues and profitability and the ability to meet certain
financial covenants as well as the potential need to raise
additional funding, (s) risks related to cost reduction efforts and
(t) other factors listed in the Company's reports filed with the
Securities and Exchange Commission (SEC), including those listed
under “Risk Factors” in the Company's Annual Report on Form 10-K
for the year ended December 31, 2016, copies of which may be
obtained by contacting the Company at 503-615-1100, from the
Company's investor relations web site at
http://investor.radisys.com/, or at the SEC's website at
http://www.sec.gov. Although forward-looking statements help
provide additional information about Radisys, investors should keep
in mind that forward-looking statements are inherently less
reliable than historical information. Should one or more of these
risks or uncertainties materialize (or the other consequences of
such a development worsen), or should underlying assumptions prove
incorrect, actual outcomes may vary materially from those
forecasted or expected. The Company believes its expectations and
assumptions are reasonable, but there can be no assurance that the
expectations reflected herein will be achieved. All information in
this press release is as of January 4, 2018. The Company undertakes
no duty to update any forward-looking statement to conform the
statement to actual results or changes in the Company's
expectations.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180104005347/en/
Company Contact:Radisys CorporationJon Wilson,
503-615-1685Chief Financial
OfficerJon.Wilson@radisys.comorInvestor Relations
Contact:Shelton GroupBrett L. Perry,
214-272-0070RadisysIR@sheltongroup.com
Radisys (NASDAQ:RSYS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Radisys (NASDAQ:RSYS)
Historical Stock Chart
From Apr 2023 to Apr 2024