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SGI
15
-3/8
delayed 20 mins - disclaimer
Wednesday January 20, 4:05 pm Eastern Time
Company Press Release
SOURCE: Silicon Graphics, Inc.
Silicon Graphics Reports Second Quarter Results
Turnaround On Track
MOUNTAIN VIEW, Calif., Jan. 20 /PRNewswire/ -- Silicon Graphics, Inc. (NYSE: SGI - news) today announced results for the second quarter of its 1999 fiscal year. Revenue for the second quarter was $685 million, compared with $851 million in the same quarter a year ago. Operating expenses for the quarter, without the effect of changes in estimated restructuring charges, were $319 million, down approximately $49 million from the same quarter a year ago.
The Company reported a net loss of $20 million, or $0.11 per share, compared with a net loss of $31 million, or $0.17 per share, in the same quarter a year ago. The Company's reported second quarter results included an $8 million reduction in previously estimated restructuring costs. Excluding the change in estimate, the Company's net loss would have been $25 million, or $0.14 per share.
''I am pleased with the progress we have made during my first year,'' said Richard Belluzzo, chairman and chief executive officer. ''Our second quarter results demonstrate that our turnaround remains on track with many important trends in the right direction. The efforts by our people to transition the Company to growth markets and tightly manage expenses has resulted in a more relevant and more competitive Silicon Graphics.''
''Our recently introduced Silicon Graphics 320 and Silicon Graphics 540 visual workstations have been well received by press and analysts alike,'' added Belluzzo. ''These products represent a significant milestone for the company and reinforce our leadership in the visual computing marketplace. We will continue focus on execution as we enter the second half of our turnaround.''
The Company's cash position remained strong during the second quarter, as a result of increased collections of accounts receivable and lower inventory purchases. Cash, cash equivalents and marketable investments were $761 million at December 31, 1998, as compared to $757 million at September 30, 1998. The Company's consolidated backlog at December 31, 1998 was $366 million. All earnings per share amounts represent diluted earnings per share as defined in Statement of Financial Accounting Standards No. 128.
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, detailed from time to time in the company's SEC reports, including the report on Form 10-K for the year ended June 30, 1998 and Form 10-Q for the quarter ended September 30, 1998.
SILICON GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
Three Months Ended Six Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1998 1997 1998 1997
(unaudited)
Product and other revenue $516,053 $697,100 $973,037 $1,317,796
Service revenue 168,770 153,665 328,142 300,962
Total revenue 684,823 850,765 1,301,179 1,618,758
Costs and expenses:
Cost of product and
other revenue 292,672 393,219 576,861 744,879
Cost of service revenue 102,301 85,772 196,852 172,035
Research and development 97,179 117,113 199,317 233,467
Selling, general and
administrative 222,005 251,262 454,933 512,683
Other operating expense (8,000)(A) 52,729(B) (8,000)(A) 71,830©
Total costs and expenses 706,157 900,095 1,419,963 1,734,894
Operating loss (21,334) (49,330) (118,784) (116,136)
Interest and other
income (expense), net (3,524) 1,538 (6,233) (769)
Loss before income taxes
and gain on sale of MTI (24,858) (47,792) (125,017) (116,905)
Benefit for income taxes
on loss before gain (4,517) (16,313) (27,553) (29,888)
Loss before gain
on sale of MTI. (20,341) (31,479) (97,464) (87,017)
Gain on sale of MTI,
net of tax of $20,506 -- -- 33,457 --
Net loss $ (20,341) $ (31,479) $(64,007) $(87,017)
Loss per common share before
gain on sale of MTI
- basic and diluted $(0.11) $ (0.17) $ (0.52) $ (0.47)
Net loss per common share
- basic and diluted $(0.11) $ (0.17) $ (0.34) $ (0.47)
Common shares outstanding
- basic and diluted 186,417 187,874 186,373 185,017
(A) Represents a change in previously estimated restructuring costs.
(B) Consists primarily of a charge for estimated restructuring costs.
(C) Consists of charges for estimated restructuring costs ($53 million),
in-process R&D ($17 million) and merger-related expenses.
SILICON GRAPHICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, June 30,
1998 1998
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 435,040 $ 506,639
Short-term marketable investments 262,296 230,081
Accounts receivable, net 465,952 665,420
Inventories 254,668 322,823
Prepaid expenses and other current assets 355,433 340,409
Total current assets 1,773,389 2,065,372
Other marketable investments 63,228 --
Net property and equipment 436,606 445,420
Other assets 508,411 453,914
$ 2,781,634 $ 2,964,706
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts and notes payable $ 151,027 $ 215,260
Other current liabilities 817,469 881,412
Total current liabilities 968,496 1,096,672
Long-term debt and other 402,318 403,522
Total stockholders' equity 1,410,820 1,464,512
$ 2,781,634 $ 2,964,706
SOURCE: Silicon Graphics, Inc.
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