Wireless network company Radisys met its guidance for the second quarter, although it still posted a net loss amid a shift to re-focus its efforts on its most profitable products.
The company posted revenues of $65.4 million, down from about $72.6 million in the same period last year. Charges included $114 million in restructuring and acquisition costs. Net income was a loss of $4.1 million, compared to a profit of $1.3 million in the prior year’s second quarter.
Brian Bronson, president and CEO of the company, said that Radisys “met or exceeded virtually all of our second quarter strategic, operational, and financial objectives.”
Bronson added that Radisys’ strategy to leverage its media resource function expertise in applications such as voice over LTE, audio and video transcoding and in providing rich communications services gained momentum, and its Trillium software solution saw a 40% increase from six months ago.
Bronson laid out the framework for the company’s strategy based on a recently completed strategic assessment.
“We concluded that we needed to do fewer things and do them very well. We needed to increase our focus and investment in our MRF product line and leverage our Trillium and software expertise into differentiated solutions, while at the same time canceling or selling non-core products lines. We also realized the organization and site structure was too complex resulting in too high a cost
structure,” he said.
Radisys plans to reduce its operating costs by about $20 million over the next 18 months, among other plans that include:
- Increasing investments in transcoding, VoLTE and RCS “to ensure we capture the market’s momentum,” Bronson said. Radisys reported that it is in 14 trials in those areas, with several expected to deploy in 2014.
- Leveraging its experience in audio conferencing to serve a broader market.
- Focusing on its expertise in LTE software, particularly small cells, and “extending it into other adjacent markets and applications that leverage similar small cell technology,” Bronson said.
Third quarter revenues for Radisys are projected to be between $55 million to $60 million due to expected decreases in the company’s legacy telecom revenues, not entirely offset by a expected 15% to 20% growth in Radisys’ software solutions.
Bronson said that the company aims to be profitable, with $240 million to $250 million in revenue, 10% operating income and about 40% gross margin at the end of 2014.
