SGI Reports Third Quarter Fiscal Year 2013 Financial Results
FREMONT, Calif., Apr. 30, 2013 - SGI (NASDAQ:SGI), the trusted leader in technical computing, today reported financial results for its third fiscal quarter ended Mar. 29, 2013. Total revenue for the third fiscal quarter was $233 million, which compares with $171 million in the previous quarter and $199 million in the third fiscal quarter of 2012.
GAAP net income for the third quarter was $9 million, or $0.27 per diluted share, which compares with net income of $1 million, or $0.03 per diluted share, in the prior quarter, and a net loss of $1 million, or $(0.04) per diluted share, in the third quarter of fiscal 2012. Non-GAAP net income for the quarter was $6 million, or $0.18 per diluted share, which compares with non-GAAP net income of $3 million, or $0.10 per diluted share, in the prior quarter and non-GAAP net income of $4 million, or $0.11 per diluted share, in the year-ago period. GAAP net income includes the impact of an $8 million tax-related benefit, which is excluded from the non-GAAP results.
"We achieved another solid financial quarter with both revenue and non-GAAP net income at the high end of our guidance, while improving our net cash position by $25 million," said Jorge Titinger, president and CEO of SGI. "As expected, in the third fiscal quarter we completed the last of the low-margin deals (LMDs), which represented approximately $50 million of revenue in the quarter and $65 million of revenue in the current fiscal year. With our emphasis on improved deal quality as well as cost reductions, we are now positioned to achieve consistent quarterly non-GAAP profitability and steady progress toward our medium-term non-GAAP operating margin target of at least 5% exiting calendar year 2013. In addition, although we still see near-term macro uncertainty related to both government and enterprise IT spending, we are investing to enhance our total solution in high-growth markets such as Big Data and high-performance Tier-2 storage, which positions SGI to grow profitably off of its current non-LMD baseline."
Outlook for Fiscal Q4 2013
For the fourth quarter ending June 28, 2013, the company is providing the following guidance:
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).
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: 33034465.
Cautionary Statement Regarding Forward Looking Statements
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 June 28, 2013 could differ materially from the targets stated under "Outlook for Fiscal Q4 2013" 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 or tax 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) charges or gains resulting from litigation or dispute settlement, and (viii) 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 Sept. 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. 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
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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