Mahmoud - Here's the official press release from PR Newswire.
Use PSR to analyze the value of the company. PSR ~ 1.1 which is a
bargain. P/E is meaningless when the "E" is so low.
Obviously this is another disappointment in a seemingly unending
string of them. Looking at the Income Statement, R&D is pretty high
year-over-year and so is SG&A. They also had the 4th round of "one
time" charges for the Cray acquisition although the numbers were not
very high this time. The bad part is that McCracken's unofficial
warning a month ago should have been construed as an "official"
warning. Obviously some big investors understood these code words and
sold off.
But the SG&A and R&D numbers indicate two things that are positive
long-term:
1. They are throwing more money at selling systems which they really
need to do and in a big way.
2. They are continuing to spend a lot of money on R&D. I believe that
this is for the development of more database hardware which is what
they really need to be doing.
A strange thing is that Fidelity has been selling (down to 3.7% from
6%) while Capital Management has been buying a lot more over the same
period (up from 5.8% to 8.6%) according to the latest SC13's on Edgar.
Also a $709M backlog for a company of this size isn't chump change.
We are all frustrated at this point but as I've said in the past, I'm
willing to wait until the end of the year before I consider selling.
Regards
Jeff
**********************************************************************
Company Sees Strong Growth in High Performance Server Business
MOUNTAIN VIEW, Calif., April 17 /PRNewswire/ -- Silicon Graphics, Inc.
(NYSE: SGI) today announced results for its third quarter ended March 31,
1997. Revenue for the third quarter of fiscal 1997 was $909 million, compared
to $677 million, or an increase of 34%, in the same quarter a year ago. On a
pro forma combined basis, Silicon Graphics and Cray Research revenue grew
15% from the $788 million in the comparable quarter a year ago. The Company's
net earnings per share was $0.09 per share excluding Cray Research merger
charges. These charges consisted of approximately $6 million of merger
charges relating primarily to the purchase accounting effect on gross margin
from the write-up of inventory and service contracts to fair value at the time
of the Cray Research merger, and other merger related expenses of $2 million.
The Company's net income for the third quarter after merger charges was
$11 million, or $0.06 per share, compared with net income of $53 million, or
$0.31 per share, in the third quarter of fiscal 1996.
For the first nine months of the fiscal year, the Company reported net
revenue of $2.5 billion, an increase of 29% over the same period for the prior
fiscal year. Net loss after merger charges was $24 million, or a loss of
$0.14 per share, compared with net income of $164 million, or $0.93 per share,
in the same period for the prior fiscal year.
"This quarter we made good progress with our transition to the new
'O Series' product line. Our new high performance desktop workstation,
Octane(TM), shipped in limited volume and completed the move to our new
product offerings," said Edward R. McCracken, chairman and chief executive
officer of Silicon Graphics, Inc. "I was pleased to see healthy server demand
from industrial, commercial and government customers. In today's rapidly
changing environment, the Origin(TM) S2MP(TM) architecture provides a highly
differentiated solution for our customers because it allows them to connect
systems into a single large system or disperse systems to meet distributed
computing requirements."
Revenue growth was adversely affected by a strong U.S. dollar, weakness in
parts of Europe and Asia, as well as the desktop product transition.
The Company's consolidated backlog at March 31, 1997 was
$709 million.
Except for the historical information contained herein, the matters
discussed in this news release are forward-looking statements that involve
risks and uncertainties, including the timely availability and acceptance of
new products, the impact of competitive products and pricing, the availability
of components, product mix, and the other risks detailed from time to time in
the Company's SEC reports, including the report on Form 10-K for the fiscal
year ended June 30, 1996 and Form 10-Q for December 31, 1996.
Silicon Graphics, Inc. is a leading supplier of high-performance
interactive computing systems. The company offers the broadest range of
products in the industry -- from low-end desktop workstations to servers and
high-end Cray(R) supercomputers. Silicon Graphics also markets MIPS.
microprocessor designs, Alias/Wavefront entertainment and design software, and
other software products. The company's key markets include manufacturing,
government, science and industries, telecommunications and entertainment
sectors. Silicon Graphics and its subsidiaries have offices throughout the
world and headquarters in Mountain View, California.
Silicon Graphics and the Silicon Graphics logo are registered trademarks
of Silicon Graphics, Inc. Octane, Origin and S2MP are trademarks of Silicon
Graphics, Inc. MIPS is a registered trademark of MIPS Technologies, Inc.
Cray is a registered trademark of Cray Research, Inc. Alias/Wavefront is a
trademark of Alias/Wavefront, a division of Silicon Graphics Limited.
Press materials are available on the World Wide Web via
sgi.com
SILICON GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(UNAUDITED)
Three Months Ended Nine Months Ended
Mar. 31, Mar. 31, Mar. 31, Mar. 31,
1997 (A) 1996 1997 (A) 1996
Product and other revenue $ 768,673 $ 595,661 $2,074,895 $ 1,717,864
Service revenue 140,697 81,270 425,389 226,079
Total revenue 909,370 676,931 2,500,284 1,943,943
Costs and expenses:
Cost of product
and other revenue 435,695 290,294 1,185,052 816,063
Cost of service revenue 81,597 39,783 239,872 117,981
Research and development 121,532 78,006 353,905 231,546
Selling, general and
administrative 254,086 195,897 740,601 561,237
Merger-related expenses 2,482 -- 7,647 1,275
Total costs and expenses 895,392 603,980 2,527,077 1,728,102
Operating (loss) income 13,978 72,951 (26,793) 215,841
Interest and other (expense)
income, net (2,156) 1,740 (4,371) 14,780
(Loss) income before
income taxes 11,822 74,691 (31,164) 230,621
Provision for income taxes 1,284 21,660 (7,312) 66,880
Net (loss) income 10,538 53,031 (23,852) 163,741
Preferred stock
dividend requirement -- -- (262) --
Net (loss) income available
to common stockholders $ 10,538 $ 53,031 $ (24,114) $ 163,741
Net (loss) income
per common share $ 0.06 $ 0.31 $ (0.14) $ 0.93
Common shares and common
share equivalents used in
the calculation of net
(loss) income per
common share 184,555 173,545 174,761 176,663
(A) March 31, 1997 amounts include the results of Cray Research, Inc.
SILICON GRAPHICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Mar. 31, June 30,
1997 1996
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 265,233 $ 257,080
Short-term marketable investments 30,172 38,316
Accounts receivable, net 861,683 978,874
Inventories 674,063 520,046
Prepaid expenses and other
current assets 264,155 301,940
Total current assets 2,095,306 2,096,255
Other marketable investments 116,044 161,541
Property and equipment, at cost 896,468 825,359
Accumulated depreciation
and amortization (398,120) (360,480)
Net property and equipment 498,348 464,879
Other assets 422,445 435,571
$ 3,132,143 $ 3,158,246
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 322,686 $ 261,120
Other current liabilities 710,004 840,318
Total current liabilities 1,032,690 1,101,438
Long-term debt and other 398,335 381,490
Stockholders' equity:
Preferred stock 16,998 16,998
Common stock 176 173
Additional paid-in capital 1,230,715 1,172,787
Retained earnings 435,425 461,311
Treasury stock -- (867)
Accumulated translation
adjustment and other 17,805 24,916
Total stockholders' equity 1,701,118 1,675,318
$ 3,132,143 $ 3,158,246
SOURCE Silicon Graphics Inc.
CONTACT: Marilyn Lattin, Director, Investor Relations,
415-933-5070, or media, John Thompson, Manager, Public Relations,
415-933-8515, both of Silicon Graphics |
