SOURCE: SGI

SGI

January 29, 2014 16:00 ET

SGI Reports Financial Results for Second Quarter of Fiscal 2014

MILPITAS, CA--(Marketwired - Jan 29, 2014) - SGI (NASDAQ: SGI), the trusted leader in high performance computing and Big Data, today reported financial results for its fiscal second quarter ended Dec. 27, 2013. Reported results were generally consistent with the preliminary results announced on Jan. 14, 2014.

Total revenue for the fiscal second quarter was $116 million, which compares with $148 million in the previous quarter and $171 million in the second fiscal quarter of 2013. GAAP net loss for the second quarter was $14 million, or $(0.40) per share, which compares with a GAAP net loss of $7 million, or $(0.20) per share, in the prior quarter, and GAAP net income of $1 million, or $0.03 per share, in the second quarter of fiscal 2013. Non-GAAP net loss for the quarter was $7 million, or $(0.20) per share, which compares with non-GAAP net income of $1 million, or $0.04 per share, in the prior quarter and non-GAAP net income of $3 million, or $0.10 per share, in the year-ago period.

  • Core revenue, which includes HPC, Big Data, storage, and services, but excludes revenue related to legacy cloud infrastructure and "low-margin deals" in prior periods, was $107 million, which compares with $132 million in the prior quarter and $133 million in the same quarter a year ago. 
  • As expected, core revenue in the company's Federal business, which includes U.S. government customers, system integrators, and higher education institutions, was impacted by the October 2013 government shutdown and its after-effects. Federal core revenue was $44 million, down from $76 million in the prior quarter and $65 million in the same quarter one year ago.
  • Outside of the Federal business (commercial and non-U.S. public sector), core revenue was $62 million, up 13% from $55 million in the prior quarter and down 8% from $68 million in the same quarter a year ago. 
  • Revenue related to the legacy cloud, which is generally commodity servers for provisioning cloud infrastructure, was $9 million, which compares with $16 million in the prior quarter and $38 million in the fiscal second quarter of 2013. The company is continuing to exit commoditized legacy account relationships.

"Final results for the quarter were consistent with the preliminary results announced earlier this month, and reflect the impact of the October government shutdown as well as the continued freezing of certain Federal intelligence-related programs," said Jorge Titinger, president and CEO of SGI. "We are extremely proud to provide high-performance compute and storage solutions for a variety of mission-critical Federal government programs, including technology platforms that help to ensure the security of the United States and our allies. We will continue to work closely with current and prospective Federal customers and ecosystem partners to support the government's near-term and long-term IT-related missions and we are confident that our overall Federal business will soon resume its growth trajectory, whether as a result of the reprogramming of currently frozen projects or new programs on behalf of civilian and defense-related customers. In addition, we are now beginning to drive sustainable growth in core revenue outside of Federal. With recent wins for our coherent shared memory UV system in Japan, a big ICE X win in Europe, and a growing list of key software and go-to-market partners, we believe we are well positioned to exploit the growing HPC and Big Data opportunities in the U.S. commercial market and overseas."

Recent Highlights

  • On Jan. 22, SGI announced that Liz King has joined the company as Senior Vice President, Worldwide Sales. She brings to SGI more than 20 years of experience developing and leading global teams to build and grow strategic account relationships and channel partners in both the enterprise and public sectors.

  • On Jan. 21, SGI launched new performance-optimized enterprise storage systems and new all-flash array for Big Data and HPC workloads. These enhancements to the SGI InfiniteStorage 5000 series will enable customers to tackle their Big Data challenges with enhanced computing, performance and scalability, accelerating the discovery of actionable insights and innovation.

  • On Jan. 14, SGI announced plans to develop an in-memory appliance based on the SAP HANA® platform, working in collaboration with SAP AG, the market leader in enterprise software and software-related services. Using the scalable shared memory architecture of SGI's next-generation UV™ system together with SAP HANA, the new in-memory appliance from SGI will be designed to streamline database management for single large node environments, which require extremely high capacity and scale to meet the needs of in-memory databases.

  • On Nov. 22, SGI announced that the Atomic Weapons Establishment (AWE) in the United Kingdom has selected three SGI® ICE™ X systems to rapidly advance sophisticated scientific and technological capabilities, and to enhance the simulation methods used to verify the safety and reliability of the Trident warhead.

  • On Nov. 22, SGI announced that it had finalized terms of its global supply chain partnership with Jabil Circuit. The relationship is expected to bring significant benefits to SGI and its customers, including a more variable cost structure, greater flexibility to respond to changes in volumes or customer requirements, shorter cycle times for certain products, and enhanced quality management.

  • On Nov. 18, SGI received seven top honors in the 2013 HPCwire Readers' and Editors' Choice Awards, recognizing the extraordinary breakthroughs and innovations SGI is powering for today's enterprises to achieve Big Data results with high performance computing.

  • On Nov. 17, SGI announced that it has been selected to supply the Data Assimilation Supercomputer at the Institute of Statistical Mathematics in Japan. The new supercomputer will be built around the SGI® UV™ 2000, SGI's large-scale shared-memory server. It will provide a shared computational infrastructure for statistical computation and data assimilation, which is a critical step in the research process of a number of scientific disciplines.

Outlook
SGI provides technical computing and storage solutions to large government, higher education, and commercial customers. Any given customer deal can include a varying mix of compute and storage hardware, software, and services, and generally will carry terms that result in most of the product revenue associated with the deal being recognized upon final shipment or acceptance of the system. The timing of booking, installation, and acceptance of large deals is difficult to predict and can cause significant swings in quarterly revenue. The company derives a significant portion of its revenue from the U.S. government and from third parties and educational institutions that receive funding from the U.S. government. Government shutdowns, protracted Federal budget deliberations, and other disruptions in the timely funding or acceptance of government-related programs can impact the approval, installation and final acceptance of systems. Management provides guidance on revenue and other items based on its current expectations of the timing of revenue and associated costs; however there can be no assurance that revenues and associated costs will be recognized according to expected schedules and management assumes no obligation to update its guidance if the timing of revenues or other circumstances in the business differ from current expectations. 

Consistent with its announcement on Jan. 14, 2014, the company reaffirmed the following guidance for the second half of fiscal 2014 ending Jun. 27, 2014:

  • Total revenue for the fiscal second half is expected to be in the range of $260 - $300 million.

  • Excluding Federal, core revenue for the second half of fiscal 2014 is expected to grow at least 30% compared with the second half of fiscal 2013. Including Federal, core revenue is expected to be in the range of flat to up 10%.

In addition, the company reaffirmed its long-term target operating model of non-GAAP gross margins of 31% to 33% and non-GAAP operating margins of 8% to 12%.

Webcast and Conference Call Information
A live webcast of the earnings conference call will be available on the Investor Relations section of the Company's website at investors.sgi.com beginning at 2:00 p.m. PT (5:00 p.m. ET). A replay of the webcast will be available approximately two hours after the conclusion of the call and will remain available until the next earnings call.

The public can also listen to the earnings conference call by dialing (888) 463-5422 (toll-free) or (970) 315-0484 (international). An audio replay of the conference call will also be made available approximately two hours after the conclusion of the call. The audio replay will remain available for five days and can be accessed by dialing (855) 859-2056 (toll-free) or (404) 537-3406 (international) and entering the confirmation code: 31111498.

About SGI
SGI, the trusted leader in high performance computing (HPC), is focused on helping customers solve their most demanding business and technology challenges by delivering technical computing, Big Data analytics, cloud computing, and petascale storage solutions that accelerate time to discovery, innovation, and profitability. Visit sgi.com (sgi.com/) for more information.

Connect with SGI on Twitter (@sgi_corp), YouTube (youtube.com/sgicorp), Facebook (facebook.com/sgiglobal) and LinkedIn (linkedin.com/company/sgi).

Cautionary Statement Regarding Forward Looking Statements
The statements made in this press release regarding projected financial results, including SGI's anticipated growth and profitability, guidance for the second half of fiscal 2014 and certain statements made in the earnings conference call, are forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Actual results could differ materially from those described by these statements due to a number of uncertainties, including, but not limited to:

  • Substantial sales to U.S. government entities, which are subject to the government's budgetary constraints;
  • Customer concentration risks;
  • Fluctuations in the buying patterns and sizes of customer orders from one quarter to the next;
  • Increased competition causing SGI to sell products or services at lower margins than expected;
  • Lengthy acceptance cycles of SGI's products by certain customers, development or product delivery delays, and delays in obtaining necessary components from suppliers;
  • The addition of new customers or loss of existing customers;
  • Unexpected changes in the price for, and the availability of, components from SGI's suppliers;
  • SGI's ability to enhance its products with new and better designs and functionality;
  • Actions taken by competitors, such as new product announcements or introductions or changes in pricing;
  • Market acceptance of newer products; and
  • SGI's increased reliance on contract manufacturing and its anticipated benefits.

In addition, SGI's actual growth in revenue and profitability for the fiscal year ending June 27, 2014 could differ materially from expectations for a number of reasons, including, but not limited to, changes driven by new accounting, regulations, interpretations or guidance and other risks as detailed in SGI's filings with the Securities and Exchange Commission ("SEC"), including those described under the caption "Risk Factors" in SGI's Annual Report on Form 10-K filed with the SEC on Sept. 9, 2013 and SGI's Quarterly Report on Form 10-Q filed with the SEC on Nov. 4, 2013, which are available at the SEC's web site at http://www.sec.gov. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this announcement. SGI undertakes no obligation to update the information in this earnings release or the related earnings conference call, whether as a result of new information, future events or otherwise, unless otherwise required by law.

Use of Non-GAAP Financial Measures
This press release and the related earnings conference call include financial measures that are not determined in accordance with U.S. generally accepted accounting principles ("GAAP"), including non-GAAP gross margin, non-GAAP net income (loss) and non-GAAP basic and diluted net income (loss) per share. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and management exercises judgment in determining which items should be excluded in the calculation of non-GAAP measures. In addition, these non-GAAP measures may be different from non-GAAP measures used by other companies. While we believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, we believe that non-GAAP measures are valuable in evaluating the company's operating performance and analyzing our business operations. Management may exclude the following items from one or more of non-GAAP measures: (1) share-based compensation; (2) amortization of intangible assets; (3) restructuring and severance charges; (4) excess and obsolete inventory write-off; (5) manufacturing transition costs; (6) gains or losses on investments; and (7) other non-recurring costs, including settlements and other items. Such measures are adjusted as described in the reconciliation of GAAP and non-GAAP numbers included in this release, if applicable; but these adjustments should not be construed as an inference that all of these adjustments or costs are unusual, infrequent or non-recurring.

In addition, management uses these non-GAAP financial measures to facilitate its review of the comparability of SGI's core operating performance on a period to period basis as well as to better understand the fundamental economics of a specific period's operational and financial performance. Management uses this view of SGI's operating performance for purposes of comparison with its business plan and individual operating budgets and allocations of resources.

Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating SGI's financial and operational performance in the same way that management evaluates the company's financial performance. However, these non-GAAP financial measures have limitations as an analytical tool, as they exclude the financial impact of transactions necessary or advisable for the conduct of SGI's business, such as the granting of equity compensation awards and are not intended to be an alternative to financial measures prepared in accordance with GAAP. Hence, to compensate for these limitations, management does not review these non-GAAP financial metrics in isolation from its GAAP results, nor should investors. Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between SGI's GAAP and non-GAAP financial results is provided in this press release. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in this release and SGI's SEC filings.

For a full reconciliation of historical non-GAAP measures referenced in this press release or today's presentation to the comparable measures under GAAP, please refer to the company's press releases on its website at www.sgi.com.

© 2014 SGI. SGI and its product names and logos are trademarks or registered trademarks of Silicon Graphics International Corp. or its subsidiaries in the United States and/or other countries. All other trademarks are property of their respective holders.

                         
                         
Silicon Graphics International Corp.  
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(In thousands, except per share amounts)  
                         
                         
    Three Months Ended     Six Months Ended  
    December 27,     December 28,     December 27,     December 28,  
    2013     2012     2013     2012  
                                 
Revenue   $ 116,060     $ 171,226     $ 263,579     $ 364,107  
Cost of revenue     82,577       123,662       191,848       274,333  
                                 
Gross profit     33,483       47,564       71,731       89,774  
                                 
Operating expenses:                                
  Research and development     14,902       15,530       29,736       29,499  
  Sales and marketing     18,815       19,664       36,411       39,235  
  General and administrative     14,547       12,383       27,029       26,572  
  Restructuring     111       2,867       637       4,341  
    Total operating expenses     48,375       50,444       93,813       99,647  
                                 
Loss from operations     (14,892 )     (2,880 )     (22,082 )     (9,873 )
                                 
  Interest income (expense), net     (46 )     (112 )     (53 )     (267 )
  Other income (expense), net     1,685       213       1,988       (894 )
    Total other income (expense), net     1,639       101       1,935       (1,161 )
Loss before income taxes     (13,253 )     (2,779 )     (20,147 )     (11,034 )
Income tax (benefit) provision     431       (3,880 )     360       (3,455 )
Net (loss) income   $ (13,684 )   $ 1,101     $ (20,507 )   $ (7,579 )
                                 
Basic net (loss) income per share   $ (0.40 )   $ 0.03     $ (0.60 )   $ (0.23 )
Diluted net (loss) income per share   $ (0.40 )   $ 0.03     $ (0.60 )   $ (0.23 )
                                 
Shares used in computing basic net (loss) income per share     34,176       32,410       34,136       32,289  
Shares used in computing diluted net (loss) income per share     34,176       32,778       34,136       32,289  
                                 
Share-based compensation by category is as follows:                                
Cost of revenue   $ 459     $ 371     $ 901     $ 871  
Research and development     706       588       1,213       1,127  
Sales and marketing     748       423       1,327       809  
General and administrative     1,604       1,114       3,052       2,200  
Total   $ 3,517     $ 2,496     $ 6,493     $ 5,007  
                                 
                                 
         
Silicon Graphics International Corp.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
         
    December 27,   June 28,
    2013   2013
ASSETS            
Current assets:            
  Cash and cash equivalents   $ 113,441   $ 175,181
  Current portion of restricted cash     2,411     531
  Accounts receivable, net     71,716     59,842
  Inventories     71,494     61,770
  Current portion of deferred cost of revenue     14,152     21,204
  Prepaid expenses and other current assets     20,570     14,094
    Total current assets     293,784     332,622
Non-current portion of restricted cash     2,166     2,853
Property and equipment, net     27,698     26,170
Intangible assets, net     7,630     4,643
Non-current portion of deferred cost of revenue     6,695     7,281
Other assets     42,329     34,284
      Total assets   $ 380,302   $ 407,853
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities:            
  Accounts payable   $ 56,789   $ 51,531
  Accrued compensation     21,198     28,504
  Current portion of deferred revenue     83,279     86,357
  Other current liabilities     35,905     35,364
    Total current liabilities     197,171     201,756
Non-current portion of deferred revenue     46,957     50,362
Long-term income taxes payable     10,360     10,149
Retirement benefit obligations     11,898     11,542
Other non-current liabilities     3,628     3,790
    Total liabilities     270,014     277,599
             
Stockholders' equity     110,288     130,254
      Total liabilities and stockholders' equity   $ 380,302   $ 407,853
                   
                   
                                                           
Silicon Graphics International Corp.  
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES  
(In thousands, except per share data)  
(Unaudited)  
                                                           
      Three Months Ended     Six Months Ended  
      December 27, 2013     December 27, 2013  
      Net
Loss
    EPS     Gross Profit   Gross Margin     Operating
Expenses
    Net
Loss
    EPS     Gross Profit  
Gross Margin
    Operating
Expenses
 
GAAP     $ (13,684 )   $ (0.40 )   $ 33,483   29 %   $ 48,375     $ (20,507 )   $ (0.60 )   $ 71,731   27 %   $ 93,813  
                                                                           
  Share-based compensation in cost of revenue (1)     459       0.01       459   1 %     -       901       0.03       901   1 %     -  
  Share-based compensation in operating expenses (1)     3,058       0.09       -   -       (3,058 )     5,592       0.16       -   -       (5,592 )
  Amortization of intangibles in cost of revenue (1)     442       0.01       442   0 %     -       697       0.02       697   0 %     -  
  Amortization of intangibles in operating expenses (1)     609       0.02       -   -       (609 )     1,189       0.03       -   -       (1,189 )
  Restructuring and severance in cost of revenue (2)     1,171       0.04       1,171   1 %     -       1,204       0.04       1,204   1 %     -  
  Restructuring and severance in operating expenses (2)     750       0.02       -   -       (750 )     1,646       0.05       -   -       (1,646 )
  Excess and obsolete inventory write-off in cost of revenue (2)     -       -       -   -       -       3,242       0.10       3,242   1 %     -  
  Other non-recurring items in cost of revenue (2)     104       -       104   0 %     -       104       -       104   0 %     -  
  Other non-recurring items in operating expenses (2)     1,990       0.06       -   -       (1,990 )     2,726       0.08       -   -       (2,726 )
  Gain on investment (2)     (1,717 )     (0.05 )     -   -       -       (1,717 )     (0.05 )     -   -       -  
  Canada tax benefits (2)     -       -       -   -       -       (611 )     (0.02 )     -   -       -  
Non-GAAP     $ (6,818 )   $ (0.20 )   $ 35,659   31 %   $ 41,968     $ (5,534 )   $ (0.16 )   $ 77,879   30 %   $ 82,660  
                                                                           
Weighted average shares used in computing:                                                                          
    Basic and dilutive net loss per share               34,176                                   34,136                      
                                                                               
                                                           
      Three Months Ended     Six Months Ended  
      December 28, 2012     December 28, 2012  
      Net
Income
   
EPS
   
Gross Profit
 
Gross Margin
    Operating
Expenses
    Net (Loss)
Income
   
EPS
   
Gross Profit
 
Gross Margin
    Operating
Expenses
 
GAAP     $ 1,101     $ 0.03     $ 47,564   28 %   $ 50,444     $ (7,579 )   $ (0.23 )   $ 89,774   25 %   $ 99,647  
                                                                           
  Share-based compensation in cost of revenue (1)     371       0.01       371   0 %     -       871       0.02       871   0 %     -  
  Share-based compensation in operating expenses (1)     2,125       0.06       -   -       (2,125 )     4,136       0.13       -   -       (4,136 )
  Amortization of intangibles in cost of revenue (1)     255       0.01       255   0 %     -       523       0.02       523   0 %     -  
  Amortization of intangibles in operating expenses (1)     689       0.02       -   -       (689 )     1,393       0.04       -   -       (1,393 )
  Restructuring and severance in cost of revenue (2)     667       0.02       667   1 %     -       895       0.02       895   0 %     -  
  Restructuring and severance in operating expenses (2)     2,862       0.09       -   -       (2,862 )     4,518       0.14       -   -       (4,518 )
  Other non-recurring items in operating expenses (2)     (438 )     (0.01 )     -   -       438       (438 )     (0.01 )     -   -       438  
  Income tax abatement (2)     (4,289 )     (0.13 )     -   -       -       (4,289 )     (0.13 )     -   -       -  
Non-GAAP     $ 3,343     $ 0.10     $ 48,857   29 %   $ 45,206     $ 30     $ 0.00     $ 92,063   25 %   $ 90,038  
                                                                           
Weighted average shares used in computing:                                                                          
    Basic net income (loss) per share               32,410                                   32,289                      
    Dilutive net income (loss) per share               32,778                                   32,289                      
                                                                           
                               
      Three Months Ended  
      September 27, 2013  
      Net (Loss)
Income
   
EPS
   
Gross Profit
 
Gross Margin
    Operating
Expenses
 
GAAP     $ (6,823 )   $ (0.20 )   $ 38,248   26 %   $ 45,438  
                                       
  Share-based compensation in cost of revenue (1)     442       0.02       442   1 %     -  
  Share-based compensation in operating expenses (1)     2,534       0.07       -   -       (2,534 )
  Amortization of intangibles in cost of revenue (1)     255       0.01       255   0 %     -  
  Amortization of intangibles in operating expenses (1)     580       0.02       -   -       (580 )
  Restructuring and severance in cost of revenue (2)     33       -       33   0 %     -  
  Restructuring and severance in operating expenses (2)     896       0.03       -   -       (896 )
  Excess and obsolete inventory write-off in cost of revenue (2)     3,242       0.09       3,242   2 %     -  
  Other non-recurring items in operating expenses (2)     736       0.02       -   -       (736 )
  Canada tax benefits (2)     (611 )     (0.02 )     -   -       -  
Non-GAAP     $ 1,284     $ 0.04     $ 42,220   29 %   $ 40,692  
                                       
Weighted average shares used in computing:                                      
    Basic net loss per share               34,096                      
    Dilutive net income per share               35,475                      
                                           
   
NOTE: This presentation includes certain financial measures not in conformity with Generally Accepted Accounting Principles in the United States (non-GAAP measures). Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
 
(1) Adjustments to exclude certain non-cash expenses such as share-based compensation and amortization of intangible assets.
   
(2) Adjustments to exclude the items discussed below because such items are either operating expenses which would not otherwise have been incurred by the company in the normal course of the company's business operations or are not reflective of the company's core results over time. These items may include recurring as well as non-recurring items.
   
  (a) Restructuring Charges and severance - Restructuring charges consist primarily of severance expense, facility closure and relocation costs
     
  (b) Other non-recurring items include settlements and other items
     
  (c) Excess and obsolete charges related to our strategic withdrawal from legacy cloud infrastructure
     
     
             
Silicon Graphics International Corp.  
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES  
GAAP to NON-GAAP EARNINGS BEFORE INTEREST, TAXES, AND AMORTIZATION & DEPRECIATION  
(In thousands)  
(Unaudited)  
             
    Three Months Ended     Six Months Ended  
    December 27, 2013     December 27, 2013  
                 
GAAP - Loss before income taxes   $ (13,253 )   $ (20,147 )
                 
  Adjustments of GAAP to Non-GAAP earnings before income taxes (*)     6,866       15,584  
                 
Non - GAAP Loss before income taxes     (6,387 )     (4,563 )
  Depreciation     2,769       5,510  
  Interest income     (20 )     (77 )
  Interest expense     66       130  
Non-GAAP EBITDA   $ (3,572 )   $ 1,000  
                 
                 
                 
    Three Months Ended     Six Months Ended  
    December 28, 2012     December 28, 2012  
                 
GAAP - Loss before income taxes   $ (2,779 )   $ (11,034 )
                 
  Adjustments of GAAP to Non-GAAP earnings before income taxes (*)     6,531       11,898  
                 
Non - GAAP Income before income taxes     3,752       864  
  Depreciation     2,649       5,176  
  Interest income     (54 )     (98 )
  Interest expense     166       365  
Non-GAAP EBITDA   $ 6,513     $ 6,307  
                 
                 
    Three Months Ended        
    September 27, 2013        
                 
GAAP - Loss before income taxes   $ (6,894 )        
                 
  Adjustments of GAAP to Non-GAAP earnings before income taxes (*)     8,718          
                 
Non - GAAP Income before income taxes     1,824          
  Depreciation     2,741          
  Interest income     (57 )        
  Interest expense     64          
Non-GAAP EBITDA   $ 4,572          
                 
(*) Refer to the Reconciliation of GAAP to Non-GAAP net income (loss) for further details  
   
   
                                 
SILICON GRAPHICS INTERNATIONAL CORP. AND SUBSIDIARIES  
TRENDED FINANCIAL DATA  
(In thousands, except per share amounts)  
(Unaudited)  
                                 
    Q1 FY13     Q2 FY13   Q3 FY13   Q4 FY13     Q1 FY14     Q2 FY14  
                                             
Revenue                                            
  Product Revenue   $ 146,315     $ 128,040   $ 187,140   $ 129,194     $ 108,820     $ 77,334  
  Service Revenue     46,566       43,186     45,448     41,338       38,699       38,726  
    Total revenue   $ 192,881     $ 171,226   $ 232,588   $ 170,532     $ 147,519     $ 116,060  
Cost of revenue                                            
  Product   $ 122,597     $ 97,350   $ 152,523   $ 99,469     $ 88,692     $ 61,343  
  Service     28,074       26,312     27,573     24,277       20,579       21,234  
    Total cost of revenue   $ 150,671     $ 123,662   $ 180,096   $ 123,746     $ 109,271     $ 82,577  
Gross margin by Product and Service                                            
  Product Gross Margin     16.2 %     24.0 %   18.5 %   23.0 %     18.5 %     20.7 %
  Service Gross Margin     39.7 %     39.1 %   39.3 %   41.3 %     46.8 %     45.2 %
    Total gross margin     21.9 %     27.8 %   22.6 %   27.4 %     25.9 %     28.8 %
                                             
    Total operating expenses   $ 49,203     $ 50,444   $ 51,006   $ 52,053     $ 45,438     $ 48,375  
                                             
Net (loss) income   $ (8,680 )   $ 1,101   $ 9,224   $ (4,465 )   $ (6,823 )   $ (13,684 )
                                             
Earnings per share                                            
  Basic net (loss) income per share   $ (0.27 )   $ 0.03   $ 0.28   $ (0.13 )   $ (0.20 )   $ (0.40 )
  Diluted net (loss) income per share   $ (0.27 )   $ 0.03   $ 0.27   $ (0.13 )   $ (0.20 )   $ (0.40 )
Shares used in computing net (loss) income per share                                            
  Basic     32,166       32,410     33,201     33,859       34,096       34,176  
  Diluted     32,166       32,778     34,467     33,859       34,096       34,176  
                                               
                                               
                         
SILICON GRAPHICS INTERNATIONAL CORP. AND SUBSIDIARIES
TRENDED REVENUE
(In thousands)
(Unaudited)
                         
    Q1 FY13   Q2 FY13   Q3 FY13   Q4 FY13   Q1 FY14   Q2 FY14
                                     
Total Revenue                                    
  Compute   $ 130,800   $ 109,129   $ 160,367   $ 97,870   $ 88,842   $ 60,418
  Storage     15,515     18,911     26,773     31,324     19,978     16,916
  Service     46,566     43,186     45,448     41,338     38,699     38,726
    Total revenue   $ 192,881   $ 171,226   $ 232,588   $ 170,532   $ 147,519   $ 116,060
                                     
Total Revenue                                    
  Americas   $ 123,385   $ 112,358   $ 142,215   $ 118,550   $ 102,212   $ 62,648
  APJ     44,434     27,735     36,314     28,084     24,266     24,383
  EMEA     25,062     31,133     54,059     23,898     21,041     29,029
    Total revenue   $ 192,881   $ 171,226   $ 232,588   $ 170,532   $ 147,519   $ 116,060
                                         

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