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ATCA/Standard Servers

RadiSys Reports $2.8M Profit

HILLSBORO, Ore. -- Radisys® Corporation (NASDAQ:RSYS - News), a leading provider of embedded wireless infrastructure solutions for telecom, aerospace, defense and public safety applications, announced revenues for the third quarter of $97.9 million and Non-GAAP revenue of $99.3 million, up $24.1 million on a non-GAAP basis as compared to the same quarter in the prior year. Next Generation Communication Networks revenue grew 74% from the same quarter in the prior year to $53.6 million, representing 55% of total revenue. Third quarter GAAP net income was $2.8 million or $0.10 per diluted share and non-GAAP net income was $6.6 million or $0.22 per diluted share. Non-GAAP results exclude the impact of purchase accounting adjustments, amortization of acquired intangible assets, stock-based compensation, restructuring and acquisition-related charges, a gain on the liquidation of a foreign subsidiary and non-recurring tax adjustments. A reconciliation of GAAP to Non-GAAP results is located in the tables below.

Commenting on the third quarter results and the new combined Radisys, Mike Dagenais, Radisys’ Chief Executive Officer stated, “Our third quarter financial results came in as expected, and we had an exceptionally strong design win quarter with awards totaling approximately $100 million in projected revenue over the next five years. The design wins were comprised of awards in virtually all of our major applications, but of particular note were wins in Traffic Management and Wireless 4G LTE Evolved Packet Core with significant, well-known customers. Since taking over the reins of the new Radisys ninety days ago, I am excited about what I see, especially the significant potential of our Next Generation Communication business. Our new combined Next Generation business is expected to exit this year at a run-rate of $200 million in revenue on an annual basis, growing at around 20% a year with gross margins of 40 to 50%. This business grew 74% in our most recent quarter and now represents 55% of total revenue. This gives us a substantial foundation for robust growth going forward, and the long expected decline of our low margin Legacy business shouldn’t cloud the significant sales and profit growth opportunity of our core Next Generation business.”

Mr. Dagenais went on to say, “The integration of Radisys and Continuous Computing is proceeding as planned and we’re on track to achieve our previously projected 2012 operating expense synergies of at least $8 to $10 million plus $5 million of synergies expected in cost of goods sold. In addition, the Board of Directors recently endorsed our strategy focused on embedded wireless infrastructure solutions that will enable our customers to solve the growing wireless network capacity issues. We believe that our combination of hardware and software expertise, along with our professional service capabilities, creates a compelling and unique offering that our customers value and our competitors will find hard to duplicate. Our primary focus is the wireless telecom market; however we are also targeting other markets where we can add value with our product breadth. These include the defense and aerospace market and the public safety market, which includes police, fire, and security applications. We will also further leverage our core competencies in hardware design by making renewed investments in medical and other commercial markets, which we expect will enable our commercial revenues to grow in 2013. We believe these strategies will enable us to grow the overall Company revenue and accelerate earnings growth in 2012 and into 2013 and beyond.”

Radisys Corp. (Nasdaq: RSYS)

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