ATCA/Standard Servers

Radisys Reports Q2

HILLSBORO, Ore. -- RadiSys Corporation (NASDAQ:RSYS) , a leading supplier of advanced embedded systems, reported revenues of $66 million for the quarter ended June 30, 2005, a 9% increase from the same period last year. Net income for the quarter was $2.6 million, or $.11 per diluted share, versus net income of $3.5 million, or $.16 per diluted share a year ago. The results for the second quarter include a net restructuring charge of $1.1 million, or $.04 per diluted share.

"We are experiencing strong demand within our communications markets as the segment strengthens and our product content continues to expand," stated Scott Grout, CEO. "We are also pleased to be seeing tangible results with our new products and investments. We booked our first ATCA revenue this quarter, and closed three new ATCA deals in the quarter. In our Commercial business, we closed our first deal on Com Express, a new standards-based product announced in the quarter."

During the second quarter the Company announced another new asset in our ATCA family of products, the Promentum(TM) ATCA-7010. The 7010 is a high-speed packet processing module that provides the highest bandwidth throughput available in a single AdvancedTCA(R) slot. This product will significantly increase the packet-processing power of our customers' systems, while at the same time reducing costs and speeding time to market. The 7010 is the latest addition to the Company's family of AdvancedTCA-compliant products, and features dual Intel(R) IXP28xx network processors which are designed to address 10 Gbps wirespeed packet processing in network applications that demand high bandwidth throughput, such as security gateways, GGSN's, Broadband-Remote Access Servers, edge routers and session controllers.

As previously announced, the Company recorded a $1.1M restructuring charge in the second quarter, for severance and related expenses for approximately 90 employees. These employees are primarily within the Company's manufacturing operations, where positions will be eliminated over the next four quarters in conjunction with continued outsourcing of production to the Company's primary manufacturing partners -- Celestica and Foxconn.

Commenting on the current business outlook, Scott Grout, CEO, said, "For the third quarter, we continue to see strong demand within our communications markets and expect to see revenues of $73 to $75 million and diluted earnings per share in the range of $.18 to $.20."

In closing, Mr. Grout stated, "We are seeing a continued movement toward standards-based platforms and modular products like ATCA and Com Express in our addressable markets. With these products, we will enable our customers to bring better products to market, faster, and at a lower total cost. We remain focused on delivering growth while continuing to increase our investments to capitalize on the growing market opportunities in front of us."

RadiSys Corp.
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