Radisys Buys Continous Computing

HILLSBORO, Ore. -- RadiSys Corporation (NASDAQ: RSYS), a leading provider of innovative hardware and software platforms for next generation IP-based wireless, wireline and video networks, announced revenues for the first quarter of $73.6 million, GAAP net loss of $529,000 or $0.02 per share, and non-GAAP net income of $2.2 million or $0.09 per diluted share.

Total revenue was $73.6 million. Next-Generation Communications Networks product revenue was $30.4 million, up 8.5% from $28.0 million in the fourth quarter of 2010 and 41% of total revenue.

GAAP gross margin was 27.5%. Non-GAAP gross margin was 29.3% and down from 33.0% in the same quarter in the prior year mainly due to continuing erosion of gross margins for older Legacy Communications products as well as lower media server revenues in the first quarter, which are projected to increase materially in the second quarter and throughout the rest of 2011.

Total GAAP Research and Development (R&D) and Selling, General and Administrative (SG&A) expenses were $20.0 million and non-GAAP R&D and SG&A expenses were $18.8 million and down $1.1 million from the prior quarter mainly due to the restructuring actions previously announced and the timing of project spending.

Cash flow from operating activities was $5.9 million. Cash and cash equivalents were $132.8 million at the end of the first quarter.

Commenting on the first quarter results and the acquisition, Scott Grout, RadiSys President and CEO stated, “We had higher than anticipated ATCA revenues as well as larger legacy communications revenues enabling us to exceed revenue expectations and come in on the high end of our earnings range for the quarter. We were awarded new ATCA business in a variety of applications including notable wins in IMS and wireless infrastructure. We entered a new geographic market with our full media server solution with application software by closing business with a leading China-based Conferencing Service Provider. We believe it represents a key milestone and an important growth opportunity for the business. Finally, RadiSys achieved ITAR compliance in the quarter to further expand our thrust into the military and defense markets with our leading platform products.” Mr. Grout went on to say, “We are very excited to bring the talented Continuous Computing team and their high value product portfolio of software and ATCA platforms into the RadiSys family. In addition to a complementary set of ATCA platform solutions, Continuous Computing’s acclaimed Trillium software and SW Professional Service business fits extremely well with our strategy of providing higher value solutions and services to our customers.”

Radisys Corp. (Nasdaq: RSYS)