SGI to Resume $40 Million Stock Repurchase Program
FREMONT, Calif., Aug 31, 2010 (BUSINESS WIRE) -- SGI (NASDAQ:SGI), a trusted leader in technical computing, today announced that it is resuming the stock repurchase program authorized by the Board of Directors and originally announced in February of 2009, providing for the repurchase of up to $40 million of the Company's stock.
"Our resumption of the previously announced repurchase program today reflects the Board of Directors' continued confidence in the Company's near and long-term financial and operating performance and commitment to enhancing shareholder value," said SGI CEO Mark J. Barrenechea. "With over $140 million in cash and equivalents, and no debt, we have the strategic flexibility to resume the repurchase program, maintain sufficient capital for operations, and continue to pursue acquisition opportunities. At current price levels, we believe SGI's common stock represents an attractive investment opportunity for the Company."
The duration of the repurchase program will continue to be open ended. Under the resumed program, the company is able to purchase shares of common stock through open market transactions and privately negotiated purchases at prices deemed appropriate by management. The timing and amount of repurchase transactions under this program will continue to depend on market conditions, corporate and regulatory considerations, alternative investment opportunities, and other relevant considerations. The program may be discontinued at any time by the Board of Directors.
As of August 31, 2010, SGI has $39 million in remaining authorization for the stock repurchase program and 30.7 million common shares outstanding.
SGI, a trusted leader in technical computing, is focused on helping customers solve their most demanding business and technology challenges. Visit www.sgi.com for more information.
Cautionary Statement Regarding Forward Looking Statements
This press release contains forward-looking statements; including statements regarding SGI's stock repurchase program. Any statements contained herein that are not statements of historical fact may be deemed forward-looking statements. Actual results may differ materially from forward-looking statements due to a number of risks and uncertainties including those associated with: the risk that SGI's stock repurchase program may not have its desired or intended effect or many not be implemented; SGI's more extensive international operations following the acquisition of Silicon Graphics, Inc.; economic conditions impacting the purchasing decisions of SGI's customers; SGI operates in a very competitive market, and increased competition and competitors' new products, have in the past, and may continue, to cause pricing pressure on SGI's products, which would negatively affect SGI's gross and operating margins, as well as other financial measures; a significant portion of the Company's revenues has come from a limited number of customers, and so the delay in placing an order, or the failure of a significant customer to place additional orders, could have a significant negative effect on SGI's financial performance; SGI relies on sales to U.S. government entities and has limited experience dealing with the U.S. government as a customer; SGI is unable to control component pricing, such as what our suppliers charge for central processing units, and, as has happened in the past, component pricing can rise unexpectedly, negatively impacting SGI's gross margins as well as other financial measures; and SGI may be required to write-off additional significant amounts of excess and obsolete inventory. Detailed information about these and other potential factors that could affect SGI's business, financial condition and results of operations is included in SGI's annual report on Form 10-K under the caption "Risk Factors," in Part I, Item 1A of that report, filed with the Securities and Exchange Commission ("SEC") on March 19, 2009, as updated by SGI's subsequent filings with the SEC, all of 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 report. SGI undertakes no responsibility to update the information in this report.
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