Enabling Wireless Infrastructure Solutions. Brian Bronson, President & CEO May 9, 2013

Transcription

1 Enabling Wireless Infrastructure Solutions Brian Bronson, President & CEO May 9, 2013

2 Safe Harbor & Non-GAAP Measures Safe Harbor Statement This presentation contains forward-looking statements, including the Company s outlook. Radisys undertakes no obligation to update any such statement to reflect later developments. Information on factors that could cause actual results to vary materially from those in this presentation is available in our most recent Annual Report on Form 10-K as filed with the SEC. Non-GAAP Measures This presentation contains non-gaap measures that are labeled as non-gaap. A reconciliation of those measures to the most comparable GAAP measures is available in the Company s prior earnings releases on Form 8-K as filed with the SEC. 2

3 Radisys Company Snapshot Market Leader Enabling Wireless Infrastructure Solutions for Telecommunications, Aerospace & Defense Applications Provide mission critical technology to enable wireless telecom networks (LTE / 3G) Media Resource Function (MRF), Radio Access (Small Cells), ATCA Systems and Solutions Category leader in telecommunications software and hardware, with history of innovation Strong player in the growing LTE wireless infrastructure market Positioned well to capture share in VoLTE, video calling/conferencing, small cell, NFV and SDN growth markets ATCA Platforms $137 Software-Solutions $ Revenue $286.5M COMe/RMS $50 Other $47 Industry Leader In ATCA, MRF And Small Cell Large Market Opportunity With Exposure To VoLTE / Small Cell / Video Trends Differentiated Technology / Solutions In Software And Platforms Highly Diversified, Global Blue-Chip Customer Base Visionary And Experienced Management Team 3

4 Our Focus Data Remains the Growth Engine Technology to solve the growing wireless network capacity challenges Exabytes* per Month 12 6 Global Data Usage Video doubles traffic every 12 months Revenue v. Traffic Growth *An exabyte equals one billion gigabytes. Source: Cisco VNI Mobile, 2012 Source: Heavy Reading 4

5 Our Product Portfolio Enabling Wireless Infrastructure Solutions ATCA / R220 Focused Investment for Growth Software - Solutions COMe/RMS Other Products % Revenue 50% 20% 20% 10% Long Term Growth 10% - 15% 20%+ 0% -50% Gross Margin* 35% - 40% 65% - 75% 20% - 25% 10% - 15% Advanced Telecommunications Computing Architecture Protocol Software Media Resource Function (MRF) Com Express Custom Boards for 2.5G 3G Wireless Infrastructure Rack Mount Server R220 Network Appliance Professional Services * Gross Margin on Non-GAAP basis. 5

6 Software and Solutions MRF Product Family MPX CMS-9000 Software MRF CMS-3000 Increasing Capabilities and Capacity Audio Conferencing (~30% market share) Turn-key system provides Real-Time Protocol (RTP) media processing required for network audio conferencing Predominantly focused on mature and stable audio conferencing market 23% 2012 year on year revenue growth Audio Conferencing + VoLTE + RCS + Video Opens up new high growth market opportunities Voice over LTE (VoLTE) Rich Communication Services (RCS) Video Gateway, Calling, Conferencing 2013 trials turning into deployments 10+ trials ongoing with meaningful carriers 6

7 Software and Solutions Trillium Small Cell turn-key application software 3G: Femtotality LTE: TOTALeNodeB Key deployments in Korea/Japan 2H 2013 Other deployments building in World s leading protocol software for processing of wireless & wireline signaling All top 10 telecom equipment manufacturers use Trillium Capacity LTE Small Cells enable Wireless Spectrum Optimization Our Trillium Focus: LTE Small Cells Femto Greater Femto Coverage Micro /Pico Macro 10+ Silicon Ecosystem Partners 7

8 T-Series ATCA / R220 Platforms Building the Foundation for Telecom Networks Broadest portfolio of ATCA products #1 supplier of telecom compute platforms Unsurpassed breadth of silicon & partner technologies Full platform integration Software & Professional Services Software / hardware specialized solutions (e.g., Deep Packet Inspection, Security, Evolved Packet Core) Markets & Applications Wireless/Wireline Voice, Data & Video Gateways Telecommunications Network Monitoring Defense & Aerospace Deep Packet Inspection Defense & Aerospace Communications Public Safety (Police, Fire, Security) 8

9 Solutions Overview Leveraging our Telecom Expertise Blend Hardware, Software, Professional Services and Wireless Expertise Drive differentiation Create stickiness Capture larger share of customer spend Customer Value Proposition Deliver tomorrow s products today Save a bundle with our bundle Selling Solutions Built on our products Integrated, customized, delivered via Professional Services 9

10 Solutions Key Focus Areas Significant Customer Traction in this New Strategic Focus Area 10

11 End-to-End LTE Infrastructure Small Cell TotaleNodeB ATCA T-Series EPC Stacks Solutions R220 ATCA T-Series MPX MRF/SIPWare 11

12 Diversified Markets, Key Customers Telecommunications Media Resource Function Aero & Defense Custom Solutions Medical & Embedded 12

13 Strong Global Footprint Vancouver Gdansk Hillsboro - HQ San Diego Boston Barcelona Shanghai Seoul Japan Bangalore Shenzhen Penang Americas 25% Software Contractors 110 Asia Pacific 73% EMEA 2% Hardware 160 Software, Pro Svcs & Architects 440 Research & Development Centers Sales / Support Offices ~1,000 Current Headcount Engineering Headcount Manufacturing Site 13

14 Financial Model $ millions (except EPS) Gross Margin ATCA 35-40% Software-Solutions 65-70% COMe/RMS 20-25% Street Est 5-10% Growth 10-15% Growth Stable Long Term Model 10-15% Growth 20%+ Growth Stable Other Legacy ~15% (50%) 0 Total Revenue $332.9 $ (5%) Decline 15-20% Growth Gross Margin % Operating Income % 33% 34% 35% ~40% 5% 2% 3% 10-12% EPS $0.55 $0.15 $0.29 All amounts presented on a Non-GAAP basis. A reconciliation of GAAP to Non-GAAP results is available in the April 25, 2013 earnings release located on the Radisys IR website and on Form 8-K represents consensus street estimates 14

15 Q1 Financial Results/Q2 Guidance Q Q2 Guidance ATCA 34.8 Flat Software-Solutions COMe/RMS Other Total Revenue 68.2 $63 - $69 Gross Profit 22.0 Gross Margin 32% 34% to 36% Operating Expense 21.7 Flat Operating Income 0.3 % Sales 1% Non-GAAP EPS 0 (3 ) - 9 Q1 financial results met expectations Generated $0.5m in cash excluding changes in debt levels $5m inventory reduction to $24m Growing Software-Solutions revenue enable Q2 expected margin expansion 10+ trials for MRF VoLTE / RCS applications (2013 trial units, 2014 deployments) Continued focus on operational improvements / efficiencies All amounts presented on a Non-GAAP basis. A reconciliation of GAAP to Non-GAAP results is available in the April 25, 2013 earnings release located on the Radisys IR website and on Form 8-K. 15

16 Liquidity As of March 31, Free Cash Flow 15 Restructuring Cash Use $M 10 5 $10m - $15m* 0 (5) (10) Q Cash Balance $32m Debt Silicon Valley Bank Line $40m line expires Sept 2014 $29m availability as of March 31, $14m unused Convertible Note Due Feb 2015, 4.5% Coupon, $8.53 convert price ($15m) ($18m) Note: Assumes April 26, 2013 street consensus financial performance before restructuring. 16

17 Summary Leadership in growing markets driven by exponential growth in Voice, Data and Video Usage Voice over LTE LTE network deployments 3G/LTE network optimization Focus on leveraging telecom expertise to enable customer s wireless network infrastructure MRF Unique Software-Hardware solutions Full system ATCA Small Cells 17