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EX-99.1 - EARNINGS RELEASE - RADISYS CORPexhibit991-thirdquarter201.htm
EX-10.2 - AMENDED LOAN AGREEMENT - RADISYS CORPexhibit102-amendment.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

_________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): November 1, 2013



RADISYS CORPORATION
(Exact name of registrant as specified in its charter)



Oregon
0-26844
93-0945232
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)



5435 NE Dawson Creek Drive
 
Hillsboro, Oregon
97124
(Address of Principal Executive Offices)
(Zip Code)

Registrant's telephone number, including area code: (503) 615-1100

No Change
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 1.01 Entry into a Material Definitive Agreement.

On November 1, 2013, Radisys Corporation (the “Company” or “Radisys”) entered into Amendment No. 1 (the “Amendment”) to the Second Amended and Restated Loan and Security Agreement between the Company and Silicon Valley Bank (“SVB”) dated July 29, 2013 (as amended, the “Credit Agreement”). The Amendment reduces the total size of the secured revolving credit facility under the Credit Agreement from $40.0 million to $35.0 million and revises the minimum two quarter rolling EBITDA financial covenant as follows: $2.0 million for the quarter ended September 30, 2013, ($3.0) million for the quarter ended December 31, 2013, and $2.0 million for the quarter ended March 31, 2014.

The Amendment also modifies the liquidity ratio which, among other items, previously required the Company to maintain a minimum cash balance of $18.0 million beginning September 30, 2014 until the Company’s convertible senior notes are repaid. The Amendment requires the Company to maintain such minimum cash balance at SVB or at a financial institution for which SVB has received a Qualifying Control Agreement (as defined in the Amendment).

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 November 5, 2013, the Company issued a press release announcing its results for the fiscal quarter ended September 30, 2013. A copy of the press release is attached hereto as Exhibit 99.1.

The Company's press release and accompanying presentation contain forward-looking statements, including statements about the Company's business strategy, financial outlook and expectations for the fourth quarter of 2013 and fiscal 2014 and statements related to timing of revenue recognition, expected customer orders, 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 a single contract manufacturer for a significant portion of the production of our products, including the success of transitioning contract manufacturing partners, (c) the anticipated amount and timing of revenues from design wins due to the Company's customers' product development time, cancellations or delays, (d) matters affecting the embedded systems industry, including changes in industry standards, changes in customer requirements and new product introductions, (e) fluctuations in currency exchange rates, changes in tariff and trade policies and other risks associated with foreign operations, (f) actions by regulatory agencies and other third parties, (g) the Company's ability to successfully manage the transition from 10G to 40G ATCA product technologies, (h) the ability of the Company to successfully complete any restructuring, acquisition or divestiture activities, (i) cash generation and (j) 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, 2012 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 November 5, 2013. 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 and (f) 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.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number
 
Description
 
 
 
10.1
 
Amendment No. 1 to the Second Amended and Restated Loan and Security Agreement, dated November 1, 2013, between Radisys Corporation and Silicon Valley Bank
99.1
 
Press Release, dated November 5, 2013.






SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
RADISYS CORPORATION
Date:
November 5, 2013
 
By:
/s/ Allen Muhich
 
 
 
 
Allen Muhich
 
 
 
 
Chief Financial Officer and Vice President of Finance (Principal Financial and Accounting Officer)







EXHIBIT INDEX
Exhibit Number
 
Description
 
 
 
10.1
 
Amendment No. 1 to the Second Amended and Restated Loan and Security Agreement, dated November 1, 2013, between Radisys Corporation and Silicon Valley Bank
99.1
 
Press Release, dated November 5, 2013.