FREMONT, Calif., Nov. 6, 2012 - SGI (NASDAQ:SGI), the trusted leader in technical computing, today reported financial results for its first quarter ended September 28, 2012. Total revenue for the first quarter was $193 million, which compares with $179 million in the previous quarter and $179 million in the first quarter of 2012.
Net loss for the first quarter was $9 million, or ($0.27) per share, which compares with a net loss of $18 million, or ($0.58) per share, in the prior quarter, and a net loss of $3 million, or ($0.08) per share, in the first quarter of fiscal 2012. Non-GAAP net loss for the quarter was $3 million, or ($0.10) per share, which compares with a non-GAAP net loss of $3 million, or ($0.10) per share, in the prior quarter and non-GAAP net income of $2 million, or $0.07 per share, in the year-ago period. Non-GAAP results for the first quarter excluded the impact of approximately $5 million of net adjustments, related to restructuring and severance charges, stock-based compensation expense, and amortization of intangibles.
"We had a solid first quarter, growing revenue by 7%, reducing operating expenses significantly compared with the prior quarter and the same quarter last year, and delivering gross margins in-line with our expectations," said Jorge Titinger, president and chief executive officer. "We are well positioned to grow in our focus market segments through our leading solutions for Big Data and other compute- and data-intensive applications. Although the macro environment for IT spending appears to be challenging in the near-term, we are on track with our objective of non-GAAP profitability for the full fiscal year."
- The company announced a win with URS, which will implement an SGI 500-Teraflop Supercomputer for DOE National Energy Technology Lab (NETL). The company also announced wins for SGI's ICE-X technology with Air Liquide of France, and with eResearch SA, which provides high-performance computing, data management and storage, research collaboration, and visualization services for researchers in South Australia.
- The company launched SGI DataRaptor™ with MarkLogic® Database, an integrated and optimized hardware and software solution designed to deliver everything needed to support Big Data applications in a single plug-and-play system. The company also released the SGI InfiniteStorage 17000, an extreme performance RAID storage system.
Outlook for Fiscal Q2 2013
For the second quarter ending December 28, 2012, the company is providing the following guidance:
- Revenue is expected to be between $180 million to $195 million;
- GAAP net loss per share is expected to be ($0.22) to ($0.14)
- Non-GAAP net income per share for the quarter is expected to be breakeven to $0.08 and is expected to exclude approximately $8 million of restructuring and severance charges, stock-based compensation expense, and intangibles amortization.
A live webcast of the earnings conference call will be available on the Investor Relations section of SGI's website at investors.sgi.com. The public can also listen to the earnings conference call at 2:00 p.m. PT (5:00 p.m. ET) by dialing (888) 463-5422 (toll-free) or (970) 315-0484 (international). Please dial in 15 minutes ahead of time to ensure proper connection.
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. 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: 46524852.
SGI, the trusted leader in technical computing, is focused on helping customers solve their most demanding business and technology challenges. Visit sgi.com for more information.
Cautionary Statement Regarding Forward Looking Statements
The statements made in this press release regarding projected financial results, financial objectives, and strategic plans, including SGI's Q2 FY13 financial guidance 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. Actual results could differ materially from those described by these statements due to a number of uncertainties, including, but not limited to:
- 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, contractual provisions or other reasons;
- The addition of new customers or loss of existing customers;
- Customer concentration risks;
- Substantial sales to U.S. government entities, which are subject to the government's budgetary constraints;
- Write-off of excess and obsolete inventory;
- 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;
- Technology regulatory compliance, certification and intellectual property issues associated with SGI's products;
- The departure and acquisition of key management and other personnel; and
- General economic trends, including changes in information technology spending or geopolitical events such as war or incidents of terrorism.
In addition, SGI's actual revenue, gross margin, earnings per share and other projections on a GAAP and non-GAAP basis for the fiscal quarter ending December 28, 2012 could differ materially from the targets stated under "Outlook for Fiscal Q2 2013 Guidance" above for a number of reasons, including, but not limited to (i) application of the actual consolidated GAAP and non-GAAP tax rates for such periods, or judgment by management to increase or decrease an income tax asset or liability, (ii) a determination by SGI that any portion of its goodwill or intangible assets have become impaired, (iii) changes in the anticipated amount of employee stock-based compensation expense recognized on SGI's financial statements, (iv) increases or decreases to estimated capital expenditures, (v) changes driven by new accounting rules, regulations, interpretations or guidance, (vi) changes in the anticipated amounts and timing of restructuring charges to be incurred and cost savings expected to be realized from our restructuring actions in Europe, (vii) expenses resulting from actual or potential transactions such as business combinations, mergers, acquisitions and financing transactions, (viii) charges or gains resulting from litigation or dispute settlement, (ix) general economic conditions, and (x) other risks as detailed in SGI's filings with the Securities and Exchange Commission ("SEC"), including those described in SGI's Annual Report on Form 10-K under the caption "Risk Factors" filed with the SEC on September 10, 2012, 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. All statements made in this press release are made only as of the date set forth at the beginning of this release November 6, 2012. SGI undertakes no obligation to update the information in this release, whether as a result of new information, future events or otherwise, unless otherwise required by law.
Use of Non-GAAP Financial Measures
The non-GAAP financial measures discussed in the text of this press release and accompanying non-GAAP supplemental information are financial measures used by SGI's management to evaluate the company's operating performance and to conduct its business operations. In evaluating SGI's performance, management uses one or more of the following measures that are not determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"): non-GAAP gross profit and gross margin, non-GAAP operating expenses, and non-GAAP net income (loss) and non-GAAP basic and diluted net income (loss) per share. These measures are adjusted as described in the reconciliation of GAAP and non-GAAP numbers at the end of this release, 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 at the end of this press release. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in SGI's SEC filings.
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