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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Radisys Corp. (delisted) | NASDAQ:RSYS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.72 | 1.71 | 1.72 | 0 | 01:00:00 |
|
|
|
(Mark one)
|
|
[x]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended
|
September 30, 2018
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
|
|
to
|
|
Commission File Number:
|
0-26844
|
|
|
OREGON
|
|
93-0945232
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
5435 N.E. Dawson Creek Drive, Hillsboro, OR
|
|
97124
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
(503) 615-1100
|
||
(Registrant's telephone number, including area code)
|
||
|
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
|
|
|
|
Page
|
PART I. FINANCIAL INFORMATION
|
|
|
|
|
|
Item 1. Financial Statements (Unaudited)
|
|
|
Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2018 and 2017
|
|
|
Condensed Consolidated Statements of Comprehensive Loss – Three and Nine Months Ended September 30, 2018 and 2017
|
|
|
Condensed Consolidated Balance Sheets – September 30, 2018 and December 31, 2017
|
|
|
Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2018 and 2017
|
|
|
Notes to Condensed Consolidated Financial Statements
|
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Item 4. Controls and Procedures
|
|
|
|
|
|
PART II. OTHER INFORMATION
|
|
|
Item 1A. Risk Factors
|
|
|
Item 6. Exhibits
|
|
|
Signatures
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
17,907
|
|
|
$
|
20,641
|
|
|
$
|
50,775
|
|
|
$
|
75,680
|
|
Service
|
9,116
|
|
|
8,132
|
|
|
26,851
|
|
|
25,796
|
|
||||
Total revenue
|
27,023
|
|
|
28,773
|
|
|
77,626
|
|
|
101,476
|
|
||||
Cost of sales:
|
|
|
|
|
|
|
|
||||||||
Product
|
9,743
|
|
|
20,361
|
|
|
30,457
|
|
|
60,450
|
|
||||
Service
|
5,314
|
|
|
5,291
|
|
|
15,229
|
|
|
15,821
|
|
||||
Amortization of purchased technology
|
226
|
|
|
1,926
|
|
|
4,080
|
|
|
5,780
|
|
||||
Total cost of sales
|
15,283
|
|
|
27,578
|
|
|
49,766
|
|
|
82,051
|
|
||||
Gross margin
|
11,740
|
|
|
1,195
|
|
|
27,860
|
|
|
19,425
|
|
||||
Research and development
|
3,467
|
|
|
5,639
|
|
|
10,388
|
|
|
18,113
|
|
||||
Selling, general and administrative
|
6,758
|
|
|
7,849
|
|
|
20,546
|
|
|
25,445
|
|
||||
Intangible asset amortization
|
197
|
|
|
289
|
|
|
593
|
|
|
2,809
|
|
||||
Restructuring and other charges, net
|
1,130
|
|
|
1,344
|
|
|
3,990
|
|
|
2,814
|
|
||||
Gain (loss) from operations
|
188
|
|
|
(13,926
|
)
|
|
(7,657
|
)
|
|
(29,756
|
)
|
||||
Change in fair value of Warrant liability
|
(599
|
)
|
|
—
|
|
|
(1,102
|
)
|
|
—
|
|
||||
Interest expense
|
(1,411
|
)
|
|
(431
|
)
|
|
(4,206
|
)
|
|
(927
|
)
|
||||
Other income (expense), net
|
1,447
|
|
|
(116
|
)
|
|
2,700
|
|
|
(543
|
)
|
||||
Income (loss) before income tax expense
|
(375
|
)
|
|
(14,473
|
)
|
|
(10,265
|
)
|
|
(31,226
|
)
|
||||
Income tax expense
|
1,498
|
|
|
938
|
|
|
2,687
|
|
|
1,747
|
|
||||
Net loss
|
$
|
(1,873
|
)
|
|
$
|
(15,411
|
)
|
|
$
|
(12,952
|
)
|
|
$
|
(32,973
|
)
|
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.05
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.85
|
)
|
Diluted
|
$
|
(0.05
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.85
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
39,616
|
|
|
39,087
|
|
|
39,496
|
|
|
38,922
|
|
||||
Diluted
|
39,616
|
|
|
39,087
|
|
|
39,496
|
|
|
38,922
|
|
||||
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss
|
$
|
(1,873
|
)
|
|
$
|
(15,411
|
)
|
|
$
|
(12,952
|
)
|
|
$
|
(32,973
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Translation adjustments gain (loss)
|
(1,155
|
)
|
|
299
|
|
|
(2,148
|
)
|
|
1,309
|
|
||||
Net adjustment for fair value of hedge derivatives, net of tax
|
572
|
|
|
(242
|
)
|
|
(61
|
)
|
|
189
|
|
||||
Other comprehensive income (loss)
|
(583
|
)
|
|
57
|
|
|
(2,209
|
)
|
|
1,498
|
|
||||
Comprehensive loss
|
$
|
(2,456
|
)
|
|
$
|
(15,354
|
)
|
|
$
|
(15,161
|
)
|
|
$
|
(31,475
|
)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
10,094
|
|
|
$
|
8,124
|
|
Restricted cash
|
4,000
|
|
|
—
|
|
||
Accounts receivable, net
|
31,130
|
|
|
32,820
|
|
||
Other receivables
|
1,381
|
|
|
3,421
|
|
||
Inventories, net
|
2,156
|
|
|
4,265
|
|
||
Other current assets
|
1,589
|
|
|
3,186
|
|
||
Total current assets
|
50,350
|
|
|
51,816
|
|
||
Property and equipment, net
|
3,242
|
|
|
4,728
|
|
||
Intangible assets, net
|
2,189
|
|
|
6,862
|
|
||
Long-term deferred tax assets, net
|
780
|
|
|
787
|
|
||
Other assets
|
1,274
|
|
|
1,836
|
|
||
Total assets
|
$
|
57,835
|
|
|
$
|
66,029
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
8,060
|
|
|
$
|
18,297
|
|
Accrued wages and bonuses
|
6,117
|
|
|
3,711
|
|
||
Deferred revenue
|
6,495
|
|
|
4,200
|
|
||
Line of credit
|
11,989
|
|
|
16,000
|
|
||
Short term debt obligations
|
9,000
|
|
|
—
|
|
||
Warrant liability
|
4,960
|
|
|
—
|
|
||
Other accrued liabilities
|
5,998
|
|
|
10,405
|
|
||
Total current liabilities
|
52,619
|
|
|
52,613
|
|
||
Long-term liabilities:
|
|
|
|
||||
Long term debt obligations, net
|
5,647
|
|
|
—
|
|
||
Other long-term liabilities
|
7,119
|
|
|
6,866
|
|
||
Total long-term liabilities
|
12,766
|
|
|
6,866
|
|
||
Total liabilities
|
65,385
|
|
|
59,479
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
||||
Shareholders’ equity (deficit):
|
|
|
|
||||
Common stock — no par value, 100,000 shares authorized; 39,621 and 39,280 shares issued and outstanding at September 30, 2018 and December 31, 2017
|
343,280
|
|
|
342,219
|
|
||
Accumulated deficit
|
(349,134
|
)
|
|
(336,182
|
)
|
||
Accumulated other comprehensive income (loss):
|
|
|
|
||||
Cumulative translation adjustments
|
(1,458
|
)
|
|
690
|
|
||
Unrealized loss on hedge instruments
|
(238
|
)
|
|
(177
|
)
|
||
Total accumulated other comprehensive income (loss)
|
(1,696
|
)
|
|
513
|
|
||
Total shareholders’ equity (deficit)
|
(7,550
|
)
|
|
6,550
|
|
||
Total liabilities and shareholders’ equity (deficit)
|
$
|
57,835
|
|
|
$
|
66,029
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(12,952
|
)
|
|
$
|
(32,973
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
6,459
|
|
|
12,396
|
|
||
Amortization of debt discount and issuance costs
|
2,465
|
|
|
—
|
|
||
Inventory valuation allowance and adverse purchase commitment charges (benefits)
|
(24
|
)
|
|
7,900
|
|
||
Deferred income taxes and uncertain tax positions
|
409
|
|
|
527
|
|
||
Stock-based compensation expense
|
957
|
|
|
1,816
|
|
||
Change in fair value of warrant liability
|
1,102
|
|
|
—
|
|
||
Other
|
673
|
|
|
216
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
1,695
|
|
|
4,530
|
|
||
Other receivables
|
1,902
|
|
|
(44
|
)
|
||
Inventories, net
|
(457
|
)
|
|
2,732
|
|
||
Accounts payable
|
(10,369
|
)
|
|
(26
|
)
|
||
Accrued restructuring
|
(2,562
|
)
|
|
(529
|
)
|
||
Accrued wages and bonuses
|
2,033
|
|
|
(3,115
|
)
|
||
Deferred revenue
|
1,546
|
|
|
(1,157
|
)
|
||
Other
|
3,026
|
|
|
1,144
|
|
||
Net cash used in operating activities
|
(4,097
|
)
|
|
(6,583
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(530
|
)
|
|
(4,544
|
)
|
||
Net cash used in investing activities
|
(530
|
)
|
|
(4,544
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings on line of credit
|
91,968
|
|
|
84,000
|
|
||
Payments on line of credit
|
(95,979
|
)
|
|
(94,000
|
)
|
||
Proceeds from borrowings on senior notes
|
17,000
|
|
|
—
|
|
||
Payments for debt issuance costs
|
(2,390
|
)
|
|
—
|
|
||
Net settlement of restricted shares
|
(29
|
)
|
|
(204
|
)
|
||
Other financing activities
|
133
|
|
|
499
|
|
||
Net cash provided by financing activities
|
10,703
|
|
|
(9,705
|
)
|
||
Effect of exchange rate changes on cash
|
(106
|
)
|
|
427
|
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
5,970
|
|
|
(20,405
|
)
|
||
Cash and cash equivalents, beginning of period
|
8,124
|
|
|
33,087
|
|
||
Restricted cash and cash equivalents, beginning of period
|
—
|
|
|
—
|
|
||
Cash, cash equivalents, and restricted cash, beginning of period
|
8,124
|
|
|
33,087
|
|
||
Cash and cash equivalents, end of period
|
10,094
|
|
|
12,682
|
|
||
Restricted cash and cash equivalents, end of period
|
4,000
|
|
|
—
|
|
||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
14,094
|
|
|
$
|
12,682
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
438
|
|
|
$
|
731
|
|
Income taxes
|
$
|
632
|
|
|
$
|
928
|
|
Machinery, equipment, furniture and fixtures
|
|
5 years
|
Software, computer hardware and manufacturing test fixtures
|
|
3 years
|
Engineering demonstration products and samples
|
|
1 year
|
Leasehold improvements
|
|
Lesser of the lease term or estimated useful lives
|
|
Fair Value Measurements as of December 31, 2017
|
|||||||||||||
Assets:
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||
Foreign currency forward contracts
|
$
|
508
|
|
|
—
|
|
|
$
|
508
|
|
|
$
|
—
|
|
Balance at January 3, 2018 (inception)
|
$
|
3,858
|
|
Change in fair value
|
1,102
|
|
|
Balance at September 30, 2018
|
$
|
4,960
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Accounts receivable, gross
|
$
|
31,274
|
|
|
$
|
32,970
|
|
Less: allowance for doubtful accounts
|
(144
|
)
|
|
(150
|
)
|
||
Accounts receivable, net
|
$
|
31,130
|
|
|
$
|
32,820
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Raw materials
|
$
|
13,688
|
|
|
$
|
23,269
|
|
Finished goods
|
2,134
|
|
|
4,012
|
|
||
|
15,822
|
|
|
27,281
|
|
||
Less: inventory valuation allowance
|
(13,666
|
)
|
|
(23,016
|
)
|
||
Inventories, net
|
$
|
2,156
|
|
|
$
|
4,265
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Inventory, net
|
$
|
250
|
|
|
$
|
5,763
|
|
|
$
|
2,538
|
|
|
$
|
6,249
|
|
Adverse purchase commitments
(A)
|
100
|
|
|
1,278
|
|
|
(2,562)
|
|
|
1,651
|
|
||||
Net charges
|
$
|
350
|
|
|
$
|
7,041
|
|
|
$
|
(24
|
)
|
|
$
|
7,900
|
|
(A)
|
When the Company takes possession of inventory reserved for under the adverse purchase liability (Note 7 —
Commitments and Contingencies),
the associated liability is transferred from other accrued liabilities to the excess and obsolete inventory valuation allowance.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Employee-related restructuring expenses
|
$
|
23
|
|
|
$
|
1,061
|
|
|
$
|
801
|
|
|
$
|
2,318
|
|
Integration-related, legal and other non-recurring expenses
|
1,107
|
|
|
226
|
|
|
2,999
|
|
|
439
|
|
||||
Facility reductions
|
—
|
|
|
57
|
|
|
190
|
|
|
57
|
|
||||
Restructuring and other charges, net
|
$
|
1,130
|
|
|
$
|
1,344
|
|
|
$
|
3,990
|
|
|
$
|
2,814
|
|
•
|
$1.1 million
in integration-related, legal and other non-recurring expenses related to the Company's contract manufacturing transfer and non-recurring costs associated with legal, banking, accounting and tax advice associated with the planned merger.
|
•
|
$1.1 million
net expense relating to the severance for
57
employees primarily in Asia and North America in connection with a reduction in legacy Hardware Solutions engineering and support staff as well as rationalization across various other functional organizations to better align with the Company's go-forward strategy. An additional
$1.0 million
of expense will be recognized over a portion of the notified employees’ respective service terms that span up to the next three quarters subsequent September 30, 2017;
|
•
|
$0.2 million
in non-recurring legal expenses; and
|
•
|
$0.1 million
in facility reductions.
|
•
|
$3.0 million
in integration-related, legal and other non-recurring expenses related to the contract manufacturing transfer and non-recurring costs associated with legal, banking, accounting and tax advice associated with the planned merger;
|
•
|
$0.8 million
expense relating to employees primarily in Asia and North America in connection with a reduction in legacy Hardware Solutions engineering and support staff as well as rationalization across various other functional organizations to better align with our go-forward strategy; and
|
•
|
$0.2 million
in facility reductions in the United States.
|
•
|
$2.3 million
net expense relating to the severance for
87
employees primarily in Asia and North America in connection with a reduction in legacy Hardware Solutions engineering and support staff as well as rationalization across various other functional organizations to better align with the Company's go-forward strategy;
|
•
|
$0.4 million
in non-recurring legal expenses associated with closing a strategic agreement with a MediaEngine channel partner; and
|
•
|
$0.1 million
in facility reductions.
|
|
Severance, payroll taxes and other employee benefits
|
|
Facility reductions
|
|
Total
|
||||||
Balance accrued as of December 31, 2017
|
$
|
2,774
|
|
|
$
|
—
|
|
|
$
|
2,774
|
|
Additions
|
985
|
|
|
190
|
|
|
1,175
|
|
|||
Reversals
|
(192
|
)
|
|
—
|
|
|
(192
|
)
|
|||
Expenditures and payments
|
(3,473
|
)
|
|
(73
|
)
|
|
(3,546
|
)
|
|||
Balance accrued as of September 30, 2018
|
$
|
94
|
|
|
$
|
117
|
|
|
$
|
211
|
|
|
December 31, 2017
|
Additions/Borrowings
|
Repayment /Amortization
|
September 30, 2018
|
||||||||
|
(In thousands)
|
|||||||||||
Notes
|
$
|
—
|
|
$
|
17,000
|
|
$
|
—
|
|
$
|
17,000
|
|
Add: Interest converted to Notes
|
—
|
|
1,388
|
|
—
|
|
1,388
|
|
||||
Less: Deferred issuance costs
|
—
|
|
(2,077
|
)
|
751
|
|
(1,326
|
)
|
||||
Less: Issuance costs associated with Warrants
|
—
|
|
(3,858
|
)
|
1,443
|
|
(2,415
|
)
|
||||
Total Debt, net of deferred issuance costs
|
—
|
|
12,453
|
|
2,194
|
|
14,647
|
|
||||
Short term debt obligations
|
—
|
|
|
|
9,000
|
|
||||||
Long term debt obligations, net
|
$
|
—
|
|
|
|
$
|
5,647
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Warranty liability balance, beginning of the period
|
$
|
1,124
|
|
|
$
|
1,821
|
|
Product warranty accruals (reversals)
|
238
|
|
|
305
|
|
||
Utilization of accrual
|
(331
|
)
|
|
(1,002
|
)
|
||
Warranty liability balance, end of the period
|
$
|
1,031
|
|
|
$
|
1,124
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(1,873
|
)
|
|
$
|
(15,411
|
)
|
|
$
|
(12,952
|
)
|
|
$
|
(32,973
|
)
|
Denominator — Basic
|
|
|
|
|
|
|
|
||||||||
Weighted average shares used to calculate net loss per share, basic
|
39,616
|
|
|
39,087
|
|
|
39,496
|
|
|
38,922
|
|
||||
Denominator — Diluted
|
|
|
|
|
|
|
|
||||||||
Weighted average shares used to calculate net loss per share, basic
|
39,616
|
|
|
39,087
|
|
|
39,496
|
|
|
38,922
|
|
||||
Effect of dilutive restricted stock units
(A)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Effect of dilutive stock options
(A)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average shares used to calculate net loss per share, diluted
|
39,616
|
|
|
39,087
|
|
|
39,496
|
|
|
38,922
|
|
||||
Net loss per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.05
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.85
|
)
|
Diluted
|
$
|
(0.05
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.85
|
)
|
(A)
|
For the
three
and nine months ended
September 30, 2018
and
2017
, the following equity awards, by type, were excluded from the calculation, as their effect would have been anti-dilutive (in thousands):
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Stock options
|
5,059
|
|
|
3,527
|
|
|
5,059
|
|
|
3,527
|
|
Restricted stock units
|
211
|
|
|
639
|
|
|
211
|
|
|
639
|
|
Performance-based restricted stock units
(B)
|
335
|
|
|
999
|
|
|
335
|
|
|
999
|
|
Warrants
|
6,067
|
|
|
—
|
|
|
6,067
|
|
|
|
|
Total equity award shares excluded
|
11,672
|
|
|
5,165
|
|
|
11,672
|
|
|
5,165
|
|
(B)
|
Performance-based restricted stock units are presented based on attainment of
100%
of the performance goals being met.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Stock options
|
—
|
|
|
30
|
|
|
2,775
|
|
|
30
|
|
Restricted stock units
|
21
|
|
|
20
|
|
|
21
|
|
|
677
|
|
Performance-based restricted stock awards
(A)
|
—
|
|
|
20
|
|
|
—
|
|
|
690
|
|
Total
|
21
|
|
|
70
|
|
|
2,796
|
|
|
1,397
|
|
(A)
|
On March 10, 2017, the Compensation Committee approved grants of PRSUs to certain employees. The awards will vest only on satisfaction of certain performance criteria during
two
separate annual performance periods and a portion of the award earned will vest upon satisfaction of a time-based service component.
50%
of the awards can be earned by meeting strategic revenue targets in fiscal year 2017 and
50%
can be earned by meeting strategic revenue targets in fiscal year 2018. One-half of any PRSUs earned during each performance period will vest upon meeting the performance criteria, and the remaining half will be subject to a further time-based service component and will vest
one year
after meeting the targets. By meeting the relevant performance criteria set forth in the award agreement, employees can earn
0%
,
75%
,
100%
or
125%
of the award during each performance period. If an employee earns less than
100%
of the award for the 2017 performance period, the employee is eligible to earn the remaining portion of the award in fiscal year 2018 if cumulative 2017 and 2018 strategic revenue targets are met in the two year period. Shares are presented based on attainment of
0%
of the performance goals being met. At attainment of
125%
, the amount of shares eligible to be earned is
418,334
.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cost of sales
|
$
|
12
|
|
|
$
|
(3
|
)
|
|
$
|
70
|
|
|
$
|
134
|
|
Research and development
|
35
|
|
|
22
|
|
|
155
|
|
|
365
|
|
||||
Selling, general and administrative
|
203
|
|
|
105
|
|
|
732
|
|
|
1,317
|
|
||||
Total
|
$
|
250
|
|
|
$
|
124
|
|
|
$
|
957
|
|
|
$
|
1,816
|
|
|
|
Contractual/ Notional
Amount
|
|
Condensed Consolidated Balance Sheets
Classification
|
|
Estimated Fair Value
|
||||||||
Type of Cash Flow Hedge
|
|
Asset
|
|
(Liability)
|
||||||||||
Foreign currency forward exchange contracts
|
|
$
|
2,007
|
|
|
Other accrued liabilities
|
|
$
|
—
|
|
|
$
|
(163
|
)
|
|
|
Contractual/ Notional
Amount
|
|
Condensed Consolidated Balance Sheets
Classification
|
|
Estimated Fair Value
|
||||||||
Type of Cash Flow Hedge
|
|
Asset
|
|
(Liability)
|
||||||||||
Foreign currency forward exchange contracts
|
|
$
|
13,018
|
|
|
Other current assets
|
|
$
|
508
|
|
|
$
|
—
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cost of sales
|
$
|
165
|
|
|
$
|
(48
|
)
|
|
$
|
140
|
|
|
$
|
(98
|
)
|
Research and development
|
122
|
|
|
(67
|
)
|
|
87
|
|
|
(137
|
)
|
||||
Selling, general and administrative
|
57
|
|
|
(22
|
)
|
|
46
|
|
|
(45
|
)
|
||||
Total
|
$
|
344
|
|
|
$
|
(137
|
)
|
|
$
|
273
|
|
|
$
|
(280
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Beginning balance of unrealized loss on forward exchange contracts
|
$
|
(810
|
)
|
|
$
|
(96
|
)
|
|
$
|
(177
|
)
|
|
$
|
(527
|
)
|
Other comprehensive income (loss) before reclassifications
|
228
|
|
|
(105
|
)
|
|
(334
|
)
|
|
469
|
|
||||
Amounts reclassified from other comprehensive income (loss)
|
344
|
|
|
(137
|
)
|
|
273
|
|
|
(280
|
)
|
||||
Other comprehensive income (loss)
|
572
|
|
|
(242
|
)
|
|
(61
|
)
|
|
189
|
|
||||
Ending balance of unrealized loss on forward exchange contracts
|
$
|
(238
|
)
|
|
$
|
(338
|
)
|
|
$
|
(238
|
)
|
|
$
|
(338
|
)
|
•
|
Software-Systems. Software-Systems is comprised of
three
product lines: FlowEngine, MediaEngine and MobilityEngine, each of which delivers software-centric solutions to service providers on a direct and indirect basis.
|
•
|
Hardware Solutions. Hardware Solutions includes the Company's embedded product portfolio and DCEngine products lines.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
Software-Systems
|
|
$
|
14,073
|
|
|
$
|
11,306
|
|
|
$
|
38,884
|
|
|
$
|
32,943
|
|
Hardware Solutions
|
|
12,950
|
|
|
17,467
|
|
|
38,742
|
|
|
68,533
|
|
||||
Total revenues
|
|
$
|
27,023
|
|
|
$
|
28,773
|
|
|
$
|
77,626
|
|
|
$
|
101,476
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Gross margin
|
|
|
|
|
|
|
|
||||||||
Software-Systems
|
$
|
8,390
|
|
|
$
|
5,420
|
|
|
$
|
22,699
|
|
|
$
|
17,128
|
|
Hardware Solutions
|
3,387
|
|
|
(2,302
|
)
|
|
8,737
|
|
|
8,211
|
|
||||
Corporate and other
|
(37
|
)
|
|
(1,923
|
)
|
|
(3,576
|
)
|
|
(5,914
|
)
|
||||
Total gross margin
|
$
|
11,740
|
|
|
$
|
1,195
|
|
|
$
|
27,860
|
|
|
$
|
19,425
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Income (loss) from operations
|
|
|
|
|
|
|
|
|
||||||||
Software-Systems
|
|
$
|
39
|
|
|
$
|
(2,358
|
)
|
|
$
|
(2,159
|
)
|
|
$
|
(7,574
|
)
|
Hardware Solutions
|
|
1,751
|
|
|
(7,885
|
)
|
|
3,547
|
|
|
(8,963
|
)
|
||||
Corporate and other
|
|
(1,602
|
)
|
|
(3,683
|
)
|
|
(9,045
|
)
|
|
(13,219
|
)
|
||||
Total income (loss) from operations
|
|
$
|
188
|
|
|
$
|
(13,926
|
)
|
|
$
|
(7,657
|
)
|
|
$
|
(29,756
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
United States
|
$
|
12,582
|
|
|
$
|
11,223
|
|
|
$
|
31,570
|
|
|
$
|
49,151
|
|
Other North America
|
93
|
|
|
269
|
|
|
386
|
|
|
703
|
|
||||
Asia Pacific ("APAC")
|
2,822
|
|
|
5,703
|
|
|
12,267
|
|
|
17,819
|
|
||||
Netherlands
|
8,257
|
|
|
7,849
|
|
|
20,370
|
|
|
21,450
|
|
||||
Other EMEA
|
3,269
|
|
|
3,729
|
|
|
13,033
|
|
|
12,353
|
|
||||
Europe, the Middle East and Africa (“EMEA”)
|
11,526
|
|
|
11,578
|
|
|
33,403
|
|
|
33,803
|
|
||||
Foreign Countries
|
14,441
|
|
|
17,550
|
|
|
46,056
|
|
|
52,325
|
|
||||
Total
|
$
|
27,023
|
|
|
$
|
28,773
|
|
|
$
|
77,626
|
|
|
$
|
101,476
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Property and equipment, net
|
|
|
|
||||
United States
|
$
|
2,055
|
|
|
$
|
2,974
|
|
Other North America
|
3
|
|
|
33
|
|
||
China
|
39
|
|
|
163
|
|
||
India
|
1,145
|
|
|
1,558
|
|
||
Total APAC
|
1,184
|
|
|
1,721
|
|
||
Foreign Countries
|
1,187
|
|
|
1,754
|
|
||
Total property and equipment, net
|
$
|
3,242
|
|
|
$
|
4,728
|
|
|
|
|
|
||||
Intangible assets, net
|
|
|
|
||||
United States
|
$
|
2,189
|
|
|
$
|
6,862
|
|
Total intangible assets, net
|
$
|
2,189
|
|
|
$
|
6,862
|
|
•
|
Software-Systems products and services are targeted at delivering differentiated solutions for service providers to enable their deployment of next generation networks and technologies. This segment is comprised of technologies aimed at enabling service providers to more rapidly adopt new technologies while driving down the costs of their network infrastructure.
|
•
|
Hardware Solutions leverages our hardware design expertise, coupled with our manufacturing, supply chain, integration and service capabilities, to enable differentiation from our competition. While the Software-Systems business will be our core strategic focus moving forward, we continue to support existing customers that value the products we deliver within our Hardware Solutions segment.
|
•
|
Revenues decreased
$1.8 million
to
$27.0 million
for the
three
months ended
September 30, 2018
from
$28.8 million
for the
three
months ended
September 30, 2017
. Hardware Solutions revenue decreased
$4.5 million
, due to expected declines in revenue from our legacy hardware business. Software-Systems revenue increased
$2.8 million
as compared to the prior year driven by strong sales of software supporting initial 5G development, expanding voice-over-LTE and conferencing deployments, and increased professional services business from both existing and new customers.
|
•
|
Gross margin increased 3,930 basis points to
43.4%
for the
three
months ended
September 30, 2018
from
4.1%
for the three months ended
September 30, 2017
. Gross margins for the
three
months ended
September 30, 2017
were adversely impacted by a $7.0 million inventory charge associated with a strategic decision to eliminate non-core legacy hardware product lines. Further gross margin expansion was realized in the quarter ended
September 30, 2018
given the increasing mix of our Software-Systems business.
|
•
|
R&D expense decreased by
$2.2 million
to
$3.5 million
for the
three
months ended
September 30, 2018
from
$5.6 million
in 2017 and was the result of reductions in headcount, stock compensation, and other product development expenses associated with our aforementioned cost-reduction initiatives.
|
•
|
Selling, general and administrative (SG&A) expense decreased
$1.1 million
to
$6.8 million
for the
three
months ended
September 30, 2018
from
$7.8 million
for the
three
months ended
September 30, 2017
. This was the result of reduction in headcount, stock compensation, and other expenses associated with our aforementioned cost-reduction initiatives.
|
•
|
Cash and cash equivalents, including restricted cash, on
September 30, 2018
increased
$6.0 million
to
$14.1 million
from
$8.1 million
at
December 31, 2017
. The increase was the result of net increases in our borrowings of $10.6 million offset by
$4.1 million
in cash consumption from operations predominantly associated with our cost reduction initiatives and payment for inventory purchase commitments not sold to our customers.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
|
|
|
|
||||
Product
|
66.3
|
%
|
|
71.7
|
%
|
|
65.4
|
%
|
|
74.6
|
%
|
Service
|
33.7
|
|
|
28.3
|
|
|
34.6
|
|
|
25.4
|
|
Total revenues
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
Cost of sales:
|
|
|
|
|
|
|
|
||||
Product
|
36.1
|
|
|
70.8
|
|
|
39.2
|
|
|
59.6
|
|
Service
|
19.7
|
|
|
18.4
|
|
|
19.6
|
|
|
15.6
|
|
Amortization of purchased technology
|
0.8
|
|
|
6.7
|
|
|
5.3
|
|
|
5.7
|
|
Total cost of sales
|
56.6
|
|
|
95.9
|
|
|
64.1
|
|
|
80.9
|
|
Gross margin
|
43.4
|
|
|
4.1
|
|
|
35.9
|
|
|
19.1
|
|
Research and development
|
12.8
|
|
|
19.6
|
|
|
13.4
|
|
|
17.8
|
|
Selling, general, and administrative
|
25.0
|
|
|
27.3
|
|
|
26.5
|
|
|
25.1
|
|
Intangible asset amortization
|
0.7
|
|
|
1.0
|
|
|
0.7
|
|
|
2.8
|
|
Restructuring and other charges, net
|
4.2
|
|
|
4.7
|
|
|
5.1
|
|
|
2.8
|
|
Income /(loss) from operations
|
0.7
|
|
|
(48.5
|
)
|
|
(9.8
|
)
|
|
(29.4
|
)
|
Change in fair value of Warrant liability
|
(2.2
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
Interest expense
|
(5.2
|
)
|
|
(1.5
|
)
|
|
(5.4
|
)
|
|
(0.9
|
)
|
Other income (expense), net
|
5.4
|
|
|
(0.4
|
)
|
|
3.6
|
|
|
(0.5
|
)
|
Loss before income tax expense
|
(1.3
|
)
|
|
(50.4
|
)
|
|
(13.0
|
)
|
|
(30.8
|
)
|
Income tax expense
|
5.5
|
|
|
3.3
|
|
|
3.7
|
|
|
1.7
|
|
Net loss
|
(6.8
|
)%
|
|
(53.7
|
)%
|
|
(16.7
|
)%
|
|
(32.5
|
)%
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Software-Systems
|
|
$
|
14,073
|
|
|
$
|
11,306
|
|
|
24.5
|
%
|
|
$
|
38,884
|
|
|
$
|
32,943
|
|
|
18.0
|
%
|
Hardware Solutions
|
|
12,950
|
|
|
17,467
|
|
|
(25.9
|
)
|
|
38,742
|
|
|
68,533
|
|
|
(43.5
|
)
|
||||
Total revenues
|
|
$
|
27,023
|
|
|
$
|
28,773
|
|
|
(6.1
|
)%
|
|
$
|
77,626
|
|
|
$
|
101,476
|
|
|
(23.5
|
)%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||
North America
|
$
|
12,675
|
|
|
$
|
11,492
|
|
|
10.3
|
%
|
|
$
|
31,956
|
|
|
$
|
49,854
|
|
|
(35.9
|
)%
|
Asia Pacific
|
2,822
|
|
|
5,703
|
|
|
(50.5
|
)
|
|
12,267
|
|
|
17,819
|
|
|
(31.2
|
)
|
||||
Europe, the Middle East and Africa ("EMEA")
|
11,526
|
|
|
11,578
|
|
|
(0.4
|
)
|
|
33,403
|
|
|
33,803
|
|
|
(1.2
|
)
|
||||
Total
|
$
|
27,023
|
|
|
$
|
28,773
|
|
|
(6.1
|
)%
|
|
$
|
77,626
|
|
|
$
|
101,476
|
|
|
(23.5
|
)%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
North America
|
46.9
|
%
|
|
39.9
|
%
|
|
41.2
|
%
|
|
49.1
|
%
|
Asia Pacific
|
10.4
|
|
|
19.8
|
|
|
15.8
|
|
|
17.6
|
|
EMEA
|
42.7
|
|
|
40.3
|
|
|
43.0
|
|
|
33.3
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||
Gross margin
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Software-Systems
|
|
$
|
8,390
|
|
|
$
|
5,420
|
|
|
54.8
|
%
|
|
$
|
22,699
|
|
|
$
|
17,128
|
|
|
32.5
|
%
|
Hardware Solutions
|
|
3,387
|
|
|
(2,302
|
)
|
|
(247.1
|
)
|
|
8,737
|
|
|
8,211
|
|
|
6.4
|
|
||||
Corporate and other
|
|
(37
|
)
|
|
(1,923
|
)
|
|
(98.1
|
)
|
|
(3,576
|
)
|
|
(5,914
|
)
|
|
(39.5
|
)
|
||||
Total gross margin
|
|
$
|
11,740
|
|
|
$
|
1,195
|
|
|
882.4
|
%
|
|
$
|
27,860
|
|
|
$
|
19,425
|
|
|
43.4
|
%
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||
Gross margin
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Software-Systems
|
|
59.6
|
%
|
|
47.9
|
%
|
|
24.4
|
%
|
|
58.4
|
%
|
|
52.0
|
%
|
|
12.3
|
%
|
Hardware Solutions
|
|
26.2
|
|
|
(13.2
|
)
|
|
298.5
|
|
|
22.6
|
|
|
12.0
|
|
|
88.3
|
|
Corporate and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total gross margin
|
|
43.4
|
%
|
|
4.2
|
%
|
|
933.3
|
%
|
|
35.9
|
%
|
|
19.1
|
%
|
|
88.0
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||
Research and development
|
$
|
3,467
|
|
|
$
|
5,639
|
|
|
(38.5)%
|
|
$
|
10,388
|
|
|
$
|
18,113
|
|
|
(42.6)%
|
Selling, general and administrative
|
6,758
|
|
|
7,849
|
|
|
(13.9)
|
|
20,546
|
|
|
25,445
|
|
|
(19.3)
|
||||
Intangible asset amortization
|
197
|
|
|
289
|
|
|
(31.8)
|
|
593
|
|
|
2,809
|
|
|
(78.9)
|
||||
Restructuring and other charges, net
|
1,130
|
|
|
1,344
|
|
|
(15.9)
|
|
3,990
|
|
|
2,814
|
|
|
41.8
|
||||
Total
|
$
|
11,552
|
|
|
$
|
15,121
|
|
|
(23.6)%
|
|
$
|
35,517
|
|
|
$
|
49,181
|
|
|
(27.8)%
|
•
|
$1.1 million
in integration-related, legal and other non-recurring expenses related to the Company's contract manufacturing transfer and non-recurring costs associated with legal, banking, accounting and tax advice associated with the planned merger.
|
•
|
$1.1 million
net expense relating to the severance for 57 employees primarily in Asia and North America in connection with a reduction in legacy Hardware Solutions engineering and support staff as well as rationalization across various other functional organizations to better align with the Company's go-forward strategy. An additional
$1.0 million
of expense will be recognized over a portion of the notified employees’ respective service terms that span up to the next three quarters subsequent September 30, 2017;
|
•
|
$0.2 million
in non-recurring legal expenses; and
|
•
|
$0.1 million
in facility reductions.
|
•
|
$3.0 million
in integration-related, legal and other non-recurring expenses related to the contract manufacturing transfer and non-recurring costs associated with legal, banking, accounting and tax advice associated with the planned merger;
|
•
|
$0.8 million
expense relating to employees primarily in Asia and North America in connection with a reduction in legacy Hardware Solutions engineering and support staff as well as rationalization across various other functional organizations to better align with our go-forward strategy; and
|
•
|
$0.2 million
in facility reductions in the United States.
|
•
|
$2.3 million
net expense relating to the severance for 87 employees primarily in Asia and North America in connection with a reduction in legacy Hardware Solutions engineering and support staff as well as rationalization across various other functional organizations to better align with the Company's go-forward strategy;
|
•
|
$0.4 million
in non-recurring legal expenses associated with closing a strategic agreement with a MediaEngine channel partner; and
|
•
|
$0.1 million
in facility reductions.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||
Cost of sales
|
$
|
12
|
|
|
$
|
(3
|
)
|
|
(500.0
|
)%
|
|
$
|
70
|
|
|
$
|
134
|
|
|
(47.8
|
)%
|
Research and development
|
35
|
|
|
22
|
|
|
59.1
|
|
|
155
|
|
|
365
|
|
|
(57.5
|
)
|
||||
Selling, general and administrative
|
203
|
|
|
105
|
|
|
93.3
|
|
|
732
|
|
|
1,317
|
|
|
(44.4
|
)
|
||||
Total
|
$
|
250
|
|
|
$
|
124
|
|
|
101.6
|
%
|
|
$
|
957
|
|
|
$
|
1,816
|
|
|
(47.3
|
)%
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||
Income (loss) from operations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Software-Systems
|
|
$
|
39
|
|
|
$
|
(2,358
|
)
|
|
(101.7
|
)%
|
|
$
|
(2,159
|
)
|
|
$
|
(7,574
|
)
|
|
(71.5
|
)%
|
Hardware Solutions
|
|
1,751
|
|
|
(7,885
|
)
|
|
(122.2
|
)
|
|
3,547
|
|
|
(8,963
|
)
|
|
(139.6
|
)
|
||||
Corporate and other
|
|
(1,602
|
)
|
|
(3,683
|
)
|
|
(56.5
|
)
|
|
(9,045
|
)
|
|
(13,219
|
)
|
|
(31.6
|
)
|
||||
Total income (loss) from operations
|
|
$
|
188
|
|
|
$
|
(13,926
|
)
|
|
(101.3
|
)%
|
|
$
|
(7,657
|
)
|
|
$
|
(29,756
|
)
|
|
(74.3
|
)%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||
Change in fair value of Warrant liability
|
$
|
(599
|
)
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
(1,102
|
)
|
|
$
|
—
|
|
|
—
|
%
|
Interest expense
|
(1,411
|
)
|
|
(431
|
)
|
|
227.4
|
|
|
(4,206
|
)
|
|
(927
|
)
|
|
353.7
|
|
||||
Interest income
|
—
|
|
|
78
|
|
|
—
|
|
|
10
|
|
|
167
|
|
|
(94.0
|
)
|
||||
Other income (expense), net
|
1,447
|
|
|
(194
|
)
|
|
(845.9
|
)
|
|
2,690
|
|
|
(710
|
)
|
|
(478.9
|
)
|
||||
Total
|
$
|
(563
|
)
|
|
$
|
(547
|
)
|
|
2.9
|
%
|
|
$
|
(2,608
|
)
|
|
$
|
(1,470
|
)
|
|
77.4
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||
Income tax expense
|
$
|
1,498
|
|
|
$
|
938
|
|
|
59.7
|
%
|
|
$
|
2,687
|
|
|
$
|
1,747
|
|
|
53.8
|
%
|
|
September 30,
2018 |
|
December 31,
2017 |
|
September 30,
2017 |
||||||
Cash and cash equivalents, including restricted cash
|
$
|
14,094
|
|
|
$
|
8,124
|
|
|
$
|
12,682
|
|
Working capital
|
(2,269
|
)
|
|
(797
|
)
|
|
11,660
|
|
|||
Accounts receivable, net
|
31,130
|
|
|
32,820
|
|
|
33,854
|
|
|||
Inventories, net
|
2,156
|
|
|
4,265
|
|
|
11,055
|
|
|||
Accounts payable
|
8,060
|
|
|
18,297
|
|
|
20,565
|
|
|||
Line of credit
|
11,989
|
|
|
16,000
|
|
|
15,000
|
|
|||
Short term debt obligations
|
9,000
|
|
|
—
|
|
|
—
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Operating Activities
|
|
|
|
||||
Net loss
|
$
|
(12,952
|
)
|
|
$
|
(32,973
|
)
|
Non-cash adjustments
|
12,041
|
|
|
23,168
|
|
||
Changes in operating assets and liabilities
|
(3,186
|
)
|
|
3,222
|
|
||
Cash used in operating activities
|
(4,097
|
)
|
|
(6,583
|
)
|
||
Cash used in investing activities
|
(530
|
)
|
|
(4,544
|
)
|
||
Cash provided by financing activities
|
10,703
|
|
|
(9,705
|
)
|
||
Effects of exchange rate changes
|
(106
|
)
|
|
427
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
5,970
|
|
|
$
|
(20,405
|
)
|
•
|
Accounts payable decreased
$10.4 million
due to the payment of previously reserved Hardware Solutions inventory purchase commitments for which we do not have future customer demand and coupled with the timing of payments to suppliers and vendors;
|
•
|
Accrued restructuring decreased
$2.6 million
from severance payments made during 2018 associated with restructuring activities commenced in late 2017;
|
•
|
Accrued wages and bonuses increased
$2.0 million
due to the timing of payroll payments and incentive compensation accrued during 2018;
|
•
|
Other receivables decreased
$1.9 million
due to lower receivables from vendors due to reduced hardware sales and the timing of payments;
|
•
|
Accounts receivable decreased
$1.7 million
due to a decrease in sales during 2018 compared to previous periods; and
|
•
|
Deferred revenue increased
$1.5 million
due to timing of orders and revenue recognition.
|
•
|
the Company's business strategy;
|
•
|
changes in reporting segments;
|
•
|
expectations and goals for revenues, gross margin, R&D expenses, SG&A expenses and profits;
|
•
|
the impact of our restructuring events on future operating results, including statements related to future growth, expense savings or reduction or operational and administrative efficiencies;
|
•
|
timing of revenue recognition;
|
•
|
expected customer orders;
|
•
|
our projected liquidity;
|
•
|
future operations and market conditions;
|
•
|
industry trends or conditions and the business environment;
|
•
|
future levels of inventory and backlog and new product introductions;
|
•
|
financial performance, revenue growth, management changes or other attributes of Radisys following acquisition or divestiture activities;
|
•
|
continued implementation of the Company's next-generation datacenter product;
|
•
|
the expected timing of completion of the Merger;
|
•
|
the expected benefits and costs of the Merger;
|
•
|
management plans relating to the Merger;
|
•
|
the satisfaction of all closing conditions to the Merger, including the ability to obtain regulatory approvals; and
|
•
|
other statements that are not historical facts.
|
•
|
an event of default would occur under our note purchase agreement with Hale Capital Partners and CIDM LendCo, LLC;
|
•
|
a limited availability of market quotations for our securities;
|
•
|
reduced liquidity with respect to our securities;
|
•
|
a determination that our ordinary shares are “penny stock” which will require brokers trading in our ordinary shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our ordinary shares;
|
•
|
a limited amount of news and analyst coverage for our company; and
|
•
|
a decreased ability to issue additional securities or obtain additional financing in the future.
|
|
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Extension Schema
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE*
|
XBRL Taxonomy Presentation Linkbase
|
101.DEF*
|
XBRL Taxonomy Definition Linkbase
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
|
|
|
RADISYS CORPORATION
|
|
Dated:
|
November 8, 2018
|
|
By:
|
/s/ Brian Bronson
|
|
|
|
|
Brian Bronson
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Dated:
|
November 8, 2018
|
|
By:
|
/s/ Jonathan Wilson
|
|
|
|
|
Jonathan Wilson
|
|
|
|
|
Chief Financial Officer and Vice President of Finance
(Principal Financial and Accounting Officer)
|
1 Year Radisys Chart |
1 Month Radisys Chart |
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