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April 27, 2010

RadiSys Posts Revenue of $67.3 Million in Q1

By Erin Harrison, Executive Editor, Strategic Initiatives

RadiSys (News - Alert)today reported first quarter results that company officials called 'stronger than expected,' closing the first quarter of 2010 with $67.3 million in revenue.

The Hillsboro, Ore.-based provider of application-ready software and hardware platforms for use in the communications, multimedia, defense and medical markets announced a GAAP net loss of $1.0 million or 4 cents per share, and non-GAAP net income of $2.8 million or 11 cents per diluted share.

Scott Grout, RadiSys president and CEO, said that the company came in at the  'upper end' of their revenue range and exceeded their expectations on earnings.

'We continued to expand our next generation revenues reaching over $30 million, our highest levels yet for shipments of these products. With a solid start to 2010, we believe that we are on track to grow our next generation business by 20 percent to 30 percent this year,' said Grout.

In turn, RadiSys officials said they expect the company's legacy business to decrease by 20 percent to 30 percent as they continue to 'roll off' and become replaced with next generation systems.

Company officials said that Q2 2010 revenue is projected to be between $70 million and $75 million and is expected to be higher sequentially due to increased legacy wireless revenues from a seasonally lower first quarter along with increased commercial revenues. Second quarter next generation product revenues are expected to be up over the same quarter last year, Grout added.

As TMCnet reported in February, Grout said at the time that the company's next-generation communications revenues were 'up more than 30 percent sequentially - paving the way for an even stronger 2010.'

'We delivered better than expected gross margins, earnings and cash flow, which put our year ending cash balance at $101 million,' Grout said during an earnings call Feb. 2, TMCnet reported. 'We have grown our Next generation Communications revenue, which has blended gross margins between 40 and 50 percent, from $36 million in 2007 to over $100 million this past year.'

Revenues from next generation products were $30.6 million, up 21.8 percent compared to the same quarter in the prior year, up 7.6 percent sequentially and represented 46 percent of total revenue.

In the fourth quarter of 2009, the company reported revenues of $78.1 million, down 11.9 percent from the same quarter in the prior year due to the continued decline in the company's lower-margin legacy products. Next-generation revenues were up 31.5 percent sequentially and were 7.3 percent higher compared with same quarter in the prior year.

RadiSys products are used in a wide variety of applications including 3G/4G/LTE (News - Alert)wireless voice, data and video, femtocell, VoIP and video over IP communications and conferencing, voice quality enhancement (VQE) and secure defense communications.

Erin Harrison is a senior editor with TMCnet, primarily covering telecom expense management, politics and technology and Web 2.0. She serves as senior editor for TMC's (News - Alert)print publications, including 'Internet Telephony', 'Customer Interaction Solutions', 'Unified Communications' and 'NGN' magazines. Erin also oversees production of TMCnet's weekly iPhone (News - Alert)e-Newsletter. To read more of Erin's articles, please visit her columnist page.

Edited by Erin Harrison

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