MILPITAS, CA — (Marketwired) — 01/28/15 — SGI (NASDAQ: SGI), a global leader in high performance solutions for compute, data analytics, and data management, today reported financial results for its fiscal second quarter 2015 ended December 26, 2014.
Total revenue for the fiscal second quarter was $138 million, an increase of 24% from $112 million in the previous quarter and an increase of 19% from $116 million in the second fiscal quarter of 2014.
GAAP net loss for the fiscal second quarter was $10 million, or $(0.30) per share, compared with a GAAP net loss of $10 million, or $(0.30) per share, in the prior quarter, and a GAAP net loss of $14 million, or $(0.40) per share, in the second quarter of fiscal 2014. Non-GAAP net income for the quarter was $0.1 million, or breakeven per diluted share, compared with a non-GAAP net loss of $5 million, or $(0.14) per share, in the prior quarter and a non-GAAP net loss of $7 million, or $(0.20) per share, in the year-ago period.
Core revenue, which excludes $1 million of revenue related to legacy cloud infrastructure business, was $137 million, an increase of 24% from $111 million in the prior quarter and 29% from $107 million in the same quarter a year ago.
Revenue from the company–s U.S. Federal business was $72 million, an increase of 19% from $61 million in the prior quarter and 63% from $44 million in the same quarter a year ago.
Core revenue in the company–s International and Commercial sectors was $65 million, an increase of 31% from $50 million in the prior quarter and 4% from $62 million in the same quarter a year ago.
“In the second quarter we made progress on our strategic priorities, including large project awards with existing and new customers. Our enterprise growth strategy began to deliver results as we further penetrated various technical computing markets and recognized our first revenue for our UV 300H product. This resulted in the highest bookings quarter we have seen in nearly three years, driven in part by the strength and diversification of our Federal business,” said Jorge Titinger, President and CEO of SGI.
In a separate press release, the company today also announced the closing of a $70 million secured term loan facility. “This successful financing enables us to fund working capital for our bookings growth, especially the large Federal program award wins, which have longer award to acceptance cycle times,” said Robert Nikl, EVP and Chief Financial Officer.
As part of the Department of Defense–s ongoing initiative to improve high performance computing (HPC) resources, SGI was awarded two contracts this quarter totaling approximately $60 million for SGI® ICE X supercomputers with SGI® InfiniteStorage. The first contract is with the US Engineer Research and Development Center, and the second is with the Air Force Research Laboratory.
SGI recognized revenue for two NASA contracts this quarter, enabling greater diversification into Federal agencies. The first was with the NASA Ames Research Center which is upgrading its flagship supercomputer, Pleiades. The second was with the NASA Center for Climate Simulation (NCCS), located at NASA–s Goddard Space Flight Center, which is enhancing its research and analysis capabilities in climate prediction.
The IT-4 National Supercomputing Center in the Czech Republic selected the SGI® ICE XA solution to further its research. At two petaflops, the new supercomputer is expected to rank as one of the 50 largest supercomputers in the world.
The company is providing the following financial outlook:
The company expects total revenue for its fiscal third quarter ending March 27, 2015 to be in the range of $120 million to $130 million.
GAAP net loss for the fiscal third quarter is expected to be in the range of $5 to $9 million, or $(0.15) to $(0.25) per share. After excluding approximately $5 million of adjustments for stock-based compensation expense, restructuring and severance costs, intangibles amortization and other items, non-GAAP net loss for the quarter is expected to be in the range of breakeven to $4 million, or $0.00 to $(0.10) per share.
The company expects total revenue for the second half of fiscal 2015 to be in the range of $290 to $310 million, which represents growth of 16% to 24% over the first half of fiscal 2015, and growth of 9% to 16% over the comparable period last year.
The company expects total revenue for its fiscal year ending June 26, 2015 to be in the range of $540 million to $560 million, reflecting annual core revenue growth of approximately 8% to 12%.
Management will host a conference call and 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 1:30 p.m. PT (4:30 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 1:30 p.m. PT (4:30 p.m. ET) 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: 61304846.
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The statements made in this press release regarding projected financial results, including SGI–s anticipated growth and profitability, guidance for the full year and third quarter of fiscal 2015, 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 factors, including, but not limited to the following: 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 risks related to SGI–s credit facility. Some of these risks and uncertainties are described in more detail in SGI–s 10-Q, 10-K and other filings with the Securities and Exchange Commission (“SEC”) and are available at the SEC–s web site at . Forward-looking statements are made based on information available to the company on the date of this press release. The company assumes no obligation to update the information in this press release.
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 and impairment of intangible assets; (3) restructuring and severance charges; (4) excess and obsolete inventory write-off; (5) gains or losses on investments; and (6) other non-recurring costs. 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. The adjustments made should not be construed as an inference that all such adjustments or costs are unusual, infrequent or non-recurring. 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 .
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SGI Investor Relations
Ben Liao
(669) 900-8090
Annie Leschin
(415) 775-1788
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