enabling wireless infrastructure solutions - jefferies group · 2013. 5. 14. · solutions in...
TRANSCRIPT
Enabling Wireless Infrastructure Solutions
May 9, 2013 Brian Bronson, President & CEO
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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.
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Radisys Company Snapshot
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
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
2012 Revenue $286.5M
ATCA Platforms
$137
COMe/RMS $50
Other $47
Software-Solutions $52
Market Leader Enabling Wireless Infrastructure Solutions for Telecommunications, Aerospace & Defense Applications
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Our Focus… Data Remains the Growth Engine
Source: Heavy Reading
0
6
12
2011 2012 2013 2014 2015 2016*An exabyte equals one billion gigabytes. Source: Cisco VNI Mobile, 2012
Global Data Usage
Technology to solve the growing wireless network capacity challenges
Exab
ytes
* per
Mon
th Video doubles traffic
every 12 months
Revenue v. Traffic Growth
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Our Product Portfolio Enabling Wireless Infrastructure Solutions
ATCA / R220 Software - Solutions COMe/RMS Other Products
Focused Investment for Growth
% Revenue 50% 20% 20% 10%
Long Term Growth 10% - 15% 20%+ 0% -50%
Gross Margin* 35% - 40% 65% - 75% 20% - 25% 10% - 15%
Professional Services
Advanced Telecommunications
Computing Architecture
Protocol Software
Media Resource Function (MRF)
Com Express
Rack Mount Server
Custom Boards for 2.5G – 3G Wireless
Infrastructure
* Gross Margin on Non-GAAP basis.
R220 Network Appliance
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Software and Solutions MRF Product Family
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
MPX-12000
Software MRF
CMS-3000
Opens up new high growth market opportunities
• Voice over LTE (VoLTE) • Rich Communication Services (RCS) • Video Gateway, Calling, Conferencing
2013 trials turning into 2014+ deployments
• 10+ trials ongoing with meaningful carriers
CMS-9000
Increasing Capabilities and Capacity
Audio Conferencing (~30% market share) Audio Conferencing + VoLTE + RCS + Video
7 10+ Silicon Ecosystem Partners
Coverage
Cap
acity
Macro
Micro /Pico
Greater Femto
Femto
Our Trillium Focus: LTE Small Cells
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 2014+
World’s leading protocol software for processing of wireless & wireline signaling
All top 10 telecom equipment manufacturers use Trillium
LTE Small Cells enable Wireless Spectrum Optimization
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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)
T-Series ATCA / R220 Platforms Building the Foundation for Telecom Networks
Deep Packet Inspection
Wireless/Wireline Voice, Data &
Video Gateways
Defense & Aerospace
Communications
Network Monitoring
Markets & Applications Telecommunications
Defense & Aerospace
Public Safety (Police, Fire, Security)
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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
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Solutions Key Focus Areas
Significant Customer Traction in this New Strategic Focus Area
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End-to-End LTE Infrastructure
Small Cell TotaleNodeB
ATCA T-Series EPC Stacks
R220 ATCA T-Series
MPX-12000 MRF/SIPWare
Solutions
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Diversified Markets, Key Customers
Telecommunications Media Resource Function Aero & Defense
Custom Solutions Medical & Embedded
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Strong Global Footprint
Vancouver
Hillsboro - HQ Boston
Gdansk
Japan
Penang
Shanghai
Shenzhen
Research & Development Centers
Sales / Support Offices
Manufacturing Site ~1,000 Current Headcount
San Diego
Bangalore
Americas 25%
EMEA 2%
Asia Pacific 73%
Software, Pro Svcs & Architects
440 Hardware
160
Software Contractors
110
Engineering Headcount
Barcelona Seoul
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Financial Model
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. 2013 represents consensus street estimates
$ millions (except EPS)
Gross Margin 2011 2012
2013 Street Est
Long Term Model
$0.29$0.15
5 - 10% Growth10 - 15% Growth
Stable
(50%)
0 - (5%) Decline
35%
EPS
Operating Income %
Gross Margin %
Total Revenue 15 - 20% Growth
$332.9 $286.4
$0.55
33% 34% ~40%
5% 2% 10 - 12%3%
Stable
Other Legacy ~15% 104.5 47.3 0
39.0 53.0
COMe/RMS 20 - 25% 56.8 49.5
10 - 15% Growth
20%+ Growth
ATCA 35 - 40% 132.5 136.6
Software-Solutions 65 - 70%
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Q1 Financial Results/Q2 Guidance
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.
Q1 2013Q2
Guidance
ATCA 34.8 FlatSoftware-Solutions 11.6 +COMe/RMS 14.6 -Other 7.1 -
Total Revenue 68.2 $63 - $69
Gross Profit 22.0Gross Margin 32% 34% to 36%
Operating Expense 21.7 Flat
Operating Income 0.3% Sales 1%
Non-GAAP EPS 0¢ (3¢) - 9¢
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Liquidity As of March 31, 2013
Q1 2013 Cash Balance $32m
Debt Silicon Valley Bank Line ($15m)
• $40m line expires Sept 2014 • $29m availability as of March 31, $14m unused
Convertible Note ($18m) • Due Feb 2015, 4.5% Coupon, $8.53 convert price
(10)
(5)
0
5
10
15
20 Free Cash Flow
Restructuring Cash Use
• Note: Assumes April 26, 2013 street consensus financial performance before restructuring.
2010 2011 2012
$M
2013
$10m - $15m*
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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