Cost cutting improves profitability for Radisys

Radisys has reaffirmed its guidance for the fourth quarter of 2002 and announced actions intended to further improve its profitability and market diversification.

Radisys has reaffirmed its guidance for the fourth quarter of 2002 and announced actions intended to further improve its profitability and market diversification.

The company has confirmed that it continues to expect improved profitability on similar revenues to its third quarter.

The company will be taking several steps intended to further improve its profitability and market diversification.

These steps include an increased level of outsourced manufacturing for product cost reduction, the planned sale of its Savvi, next-generation telecomms IP signalling business to enable further diversification, and other reductions in spending.

"Our business in the fourth quarter held up well and we are now undertaking actions to move beyond break-even and back to profitability at current levels of business", said Scott Grout the Company's President and CEO.

"In addition, we are increasing our investments for growth in programs where we can leverage our leading solutions and expertise today in a diversified set of end markets such as medical systems, industrial automation, test and measurement, enterprise, communications and transaction terminals".

Over the past several quarters Radisys has increased its level of outsourced manufacturing to take advantage of the reduced costs and increased flexibility provided by contract manufacturers.

This effort has improved the company's cost of goods and has resulted in a reduction of the required size of the internal manufacturing workforce.

The company will continue to evaluate and adjust its level of manufacturing outsourcing to optimise product cost and customer service.

The company also plans to sell its Savvi, next-generation telecom IP signalling business.

Savvi products are designed to allow carriers to change their current signalling hierarchy to a next-generation all-IP architecture.

These products will be deployed into next-generation carrier networks and Radisys is seeking a buyer that is able to directly address the carriers as future network architectures emerge.

If an acceptable sale of the Savvi assets cannot be achieved, the company will evaluate alternatives to reduce its current level of spending on this next-generation signalling architecture.

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