Item 1.01. Entry into a Material Definitive Agreement.
On October 29, 2012, Radisys Corporation (the "Company" or "Radisys") entered
into Amendment No. 2 (the "Amendment") to its Amended and Restated Loan and
Security Agreement with Silicon Valley Bank ("SVB") dated November 1, 2011 (as
amended, the "Credit Agreement"). The Amendment decreases the minimum two
quarter rolling EBITDA (as defined in the Credit Agreement) required to be
achieved by the Company under its minimum EBITDA financial covenant to $(3.5)
million for the quarter ended December 31, 2012, $(1.0) million for the quarter
ended March 31, 2013 and $3.0 million for the quarter ended June 30, 2013 and
thereafter. In addition, the Amendment revises the liquidity financial covenant
in the Credit Agreement to require that liquidity testing be performed on a
monthly basis when obligations are outstanding under the Credit Agreement.
The Amendment also revises the calculation of the Availability Amount (as
defined in the Credit Agreement) such that all permitted borrowings under the
Credit Agreement are now fully subject to the borrowing base formula contained
in the Credit Agreement.
The foregoing description of the Amendment does not purport to be complete and
is qualified in its entirety by reference to the full text of the Amendment,
which is attached to this report as Exhibit 10.1 and is incorporated herein by
reference.
Item 2.02 Results of Operations and Financial Condition.
The information in this Item 2.02 and the Exhibits attached hereto shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933 or any proxy statement or report or other document we may
file with the Securities Exchange Commission ("SEC"), regardless of any general
incorporation language in any such filing, except as shall be expressly set
forth by specific reference in such filing.
On October 30, 2012, the Company issued a press release announcing its results
for the fiscal quarter ended September 30, 2012. A copy of this press release is
attached hereto as Exhibit 99.1.
The Company's press release contains forward-looking statements, including
statements about the Company's business strategy, financial outlook and
expectations for the fourth quarter of 2012 and statements related to expense
savings or reductions, 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, 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) the
Company's dependence on certain customers and high degree of customer
concentration, (b) the Company's use of one contract manufacturer for a
significant portion of the production of its products, (c) the anticipated
amount and timing of revenues from design wins due to the Company's customers'
product development time, cancellations or delays, (d) fluctuations in currency
exchange rates, (e) the ability of the Company to successfully integrate the
business and operations of Continuous Computing and higher than expected costs
of integration, (f) the Company's ability to successfully manage the transition
from 10G to 40G ATCA product technologies, (g) performance and customer
acceptance of the Trillium line of products, (h) the combined Company's
financial results and performance and (i) other factors listed in the Company's
reports filed with the Securities and Exchange Commission (SEC), including those
listed under "Risk Factors" in Radisys' Annual Report on Form 10-K for the year
ended December 31, 2011 and in Radisys' subsequent Quarterly Reports on Form
10-Q, 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 or in the press release will be achieved. All information in
the press release is as of October 30, 2012. 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.
To supplement its consolidated financial statements in accordance with generally
accepted accounting principles ("GAAP"), the Company's earnings release contains
non-GAAP financial measures that exclude certain expenses, gains and losses,
such as the effects of (a) purchase accounting adjustments, (b) amortization of
acquired intangible assets, (c) stock-based compensation expense, (d)
restructuring and acquisition-related charges (reversals), net, (e) impairment
of goodwill, (f) gain on the liquidation of a foreign subsidiary, and (g) income
taxes. The Company believes that the use of non-GAAP
financial measures provides useful information to investors to gain an overall
understanding of its current financial performance and its prospects for the
future. Specifically, the Company believes the non-GAAP results provide useful
information to both management and investors by excluding certain expenses,
gains and losses that the Company believes are not indicative of its core
operating results. In addition, non-GAAP financial measures are used by
management for budgeting and forecasting as well as subsequently measuring the
Company's performance, and the Company believes that it is providing investors
with financial measures that most closely align to its internal measurement
processes. These non-GAAP measures are considered to be reflective of the
Company's core operating results as they more closely reflect the essential
revenue-generating activities of the Company and direct operating expenses
(resulting in cash expenditures) needed to perform these revenue-generating
activities. The Company also believes, based on feedback provided to the Company
during its earnings calls' Q&A sessions and discussions with the investment
community, that the non-GAAP financial measures it provides are necessary to
allow the investment community to construct their valuation models to better
align its results and projections with its competitors and market sector, as
there is significant variability and unpredictability across companies with
respect to certain expenses, gains and losses.
The non-GAAP financial information is presented using consistent methodology
from quarter-to-quarter and year-to-year. These measures should be considered in
addition to results prepared in accordance with GAAP. In addition, these
non-GAAP financial measures are not based on any comprehensive set of accounting
rules or principles. The Company believes that non-GAAP financial measures have
limitations in that they do not reflect all of the amounts associated with the
Company's results of operations as determined in accordance with GAAP and that
these measures should only be used to evaluate the Company's results of
operations in conjunction with the corresponding GAAP financial measures.
A reconciliation of non-GAAP information to GAAP information is included in the
table set forth in the press release. The non-GAAP financial measures disclosed
by the Company should not be considered a substitute for or superior to
financial measures calculated in accordance with GAAP, and reconciliations
between GAAP and non-GAAP financial measures included in this earnings release
should be carefully evaluated. The non-GAAP financial measures used by the
Company may be calculated differently from, and therefore may not be comparable
to, similarly titled measures used by other companies.
Add
RSYS to Portfolio
Set Alert
Email to a
Friend