Total revenue for the first quarter was
'This quarter we made solid progress penetrating key High Performance Computing (HPC) vertical markets and had our strongest quarter to date in our in-memory business, where we added to our growing customer list and recently achieved industry-leading 32 socket certification with Oracle Linux,' said
Recent Highlights
- The latest addition to the SGI UV in-memory product server line, the 300RL, is now certified up to 32 sockets with Oracle Linux. This milestone makes the SGI system the first and only one to achieve certification at this level. This certification dramatically expands our addressable market for in-memory databases with support for the top two ISVs.
- The SGI UV 300H single-node platform has deployed more than 200 Terabytes of total in-memory computing capacity to organizations running the SAP HANA® platform on over 50 systems worldwide.
Kyoto University'sInstitute for Chemical Research , one of the world's leading life science research labs, recently awarded SGI a contract for its next supercomputer. The system consists of two UV2000 16TB shared memory servers and Rackable Standard Depth clusters. In total, this hybrid system will provide over 9.4PB of storage with a large capacity Network File System.NASA's Pleiades supercomputer, based on SGI's ICE X racks, made its debut at number five in the world on the HPCG benchmarking list, the new metric for supercomputing performance. This supercomputer's upgrades include 4,176 12-core Haswell processors, each performing twice as many scientific calculations per second as the previous generation of Intel processors.
Outlook
Consistent with its previously provided outlook for the full year, the company continues to expect:
- Revenue in the range of
$600 to$625 million , or year-over-year growth of 15% - 20%; - Non-GAAP gross margin between 26% and 27%;
- Non-GAAP operating expenses flat to down 5% year-over-year;
-
Non-GAAP net income in the range of
$0.25 to$0.35 per share after excluding approximately$17 million of adjustments; and -
GAAP net loss in the range of
$(0.11) to$(0.21) per share.
For the second quarter, the company currently expects to achieve non-GAAP profitability based on approximately
Conference Call and Webcast
SGI's first quarter fiscal 2016 financial results conference call is scheduled to take place on
The earnings conference call can also be accessed by dialing (888) 463-5422 (toll-free) or (970) 315-0484 (international) and entering the confirmation code: 51529588. 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: 51529588.
About SGI
SGI is a global leader in high performance solutions for compute, data analytics and data management that enable customers to accelerate time to discovery, innovation and profitability. Visit sgi.com for more information.
Connect with SGI on Twitter (@sgi_corp),
Forward Looking Statements
The statements made in this press release regarding projected financial results, including SGI's growth strategy, outlook regarding future profitability and positive cash generation, as well as 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: 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 and their effects on SGI's revenue and liquidity; development or product delivery delays, delays in obtaining necessary components from suppliers or delays in customer acceptance once products are delivered; 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 term loan. Some of these risks and uncertainties are described in more detail in SGI's most recent Form 10-K and other filings with the
Use of Non-GAAP Financial Measures
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-offs; (5) gains or losses on investments; and (6) other non-recurring costs. Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between 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
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 www.sgi.com.
© 2015
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(In thousands, except per share amounts) | |||||||||
Three Months Ended | |||||||||
2015 | 2014 | ||||||||
Revenue | $ | 126,307 | $ | 111,701 | |||||
Cost of revenue | 97,843 | 79,329 | |||||||
Gross profit | 28,464 | 32,372 | |||||||
Operating expenses: | |||||||||
Research and development | 13,180 | 13,200 | |||||||
Sales and marketing | 12,568 | 15,861 | |||||||
General and administrative | 11,907 | 13,305 | |||||||
Restructuring | - | 116 | |||||||
Total operating expenses | 37,655 | 42,482 | |||||||
Loss from operations | (9,191 | ) | (10,110 | ) | |||||
Interest expense, net | (2,029 | ) | (42 | ) | |||||
Other (expense) income, net | (103 | ) | 143 | ||||||
Total other (expense) income, net | (2,132 | ) | 101 | ||||||
Loss before income taxes | (11,323 | ) | (10,009 | ) | |||||
Income tax provision | 249 | 324 | |||||||
Net loss | $ | (11,572 | ) | $ | (10,333 | ) | |||
Basic and diluted net loss per share | $ | (0.33 | ) | $ | (0.30 | ) | |||
Shares used in computing basic and diluted net loss per share | 35,174 | 34,420 | |||||||
Share-based compensation by category is as follows: | |||||||||
Cost of revenue | $ | 525 | $ | 466 | |||||
Research and development | 706 | 559 | |||||||
Sales and marketing | 518 | 801 | |||||||
General and administrative | 2,158 | 1,673 | |||||||
Total | $ | 3,907 | $ | 3,499 |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
2015 | 2015 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 94,911 | $ | 67,191 | ||||
Current portion of restricted cash | 2,109 | 2,109 | ||||||
Accounts receivable, net | 55,658 | 118,219 | ||||||
Inventories | 92,168 | 82,832 | ||||||
Current portion of deferred cost of revenue | 12,019 | 12,108 | ||||||
Prepaid expenses and other current assets | 12,304 | 17,547 | ||||||
Total current assets | 269,169 | 300,006 | ||||||
Non-current portion of restricted cash | 2,224 | 2,251 | ||||||
Property and equipment, net | 39,869 | 38,480 | ||||||
11,202 | 11,303 | |||||||
Non-current portion of deferred cost of revenue | 9,535 | 9,648 | ||||||
Other non-current assets | 26,937 | 25,896 | ||||||
Total assets | $ | 358,936 | $ | 387,584 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 49,126 | $ | 48,677 | ||||
Accrued compensation | 15,871 | 17,797 | ||||||
Short-term debt, net of unamortized debt issuance costs | 4,004 | 3,096 | ||||||
Current portion of deferred revenue | 84,311 | 96,473 | ||||||
Other current liabilities | 24,607 | 33,180 | ||||||
Total current liabilities | 177,919 | 199,223 | ||||||
Long-tem debt, net of unamortized debt issuance costs | 66,243 | 65,581 | ||||||
Non-current portion of deferred revenue | 42,311 | 43,781 | ||||||
Long-term income taxes payable | 7,839 | 8,420 | ||||||
Retirement benefit obligations | 9,273 | 9,330 | ||||||
Other non-current liabilities | 7,777 | 7,871 | ||||||
Total liabilities | 311,362 | 334,206 | ||||||
Stockholders' equity | 47,574 | 53,378 | ||||||
Total liabilities and stockholders' equity | $ | 358,936 | $ | 387,584 |
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES | |||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||
Net | Gross Profit | Operating | |||||||||||||||||||||||
Loss | EPS | Product | Service | Total | Expenses | ||||||||||||||||||||
GAAP | $ | (11,572 | ) | $ | (0.33 | ) | $ | 14,180 | $ | 14,284 | $ | 28,464 | $ | 37,655 | |||||||||||
Share-based compensation | (1) | 3,907 | 0.11 | 109 | 416 | 525 | (3,382 | ) | |||||||||||||||||
Amortization of acquired intangibles | (1) | 92 | - | 75 | - | 75 | (17 | ) | |||||||||||||||||
Restructuring and severance | (2) | 944 | 0.03 | - | 123 | 123 | (821 | ) | |||||||||||||||||
Other non-recurring items | (2) | 1,283 | 0.04 | - | 23 | 23 | (1,260 | ) | |||||||||||||||||
Non-GAAP | $ | (5,346 | ) | $ | (0.15 | ) | $ | 14,364 | $ | 14,846 | $ | 29,210 | $ | 32,175 | |||||||||||
Gross Margin | |||||||||||||||||||||||||
Gross margin on a GAAP basis | 15.1 | % | 44.3 | % | 22.5 | % | |||||||||||||||||||
Gross margin on a Non-GAAP basis | 15.3 | % | 46.1 | % | 23.1 | % | |||||||||||||||||||
Weighted average shares used in computing: | |||||||||||||||||||||||||
Basic and diluted net loss per share | 35,174 | ||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||
Net | Gross Profit | Operating | |||||||||||||||||||||||
Loss | EPS | Product | Service | Total | Expenses | ||||||||||||||||||||
GAAP | $ | (10,333 | ) | $ | (0.30 | ) | $ | 16,109 | $ | 16,263 | $ | 32,372 | $ | 42,482 | |||||||||||
Share-based compensation | (1) | 3,499 | 0.10 | 107 | 359 | 466 | (3,033 | ) | |||||||||||||||||
Amortization of acquired intangibles | (1) | 215 | 0.01 | 144 | - | 144 | (71 | ) | |||||||||||||||||
Restructuring and severance | (2) | 1,092 | 0.03 | 158 | 279 | 437 | (655 | ) | |||||||||||||||||
Other non-recurring items | (2) | 550 | 0.02 | - | - | - | (550 | ) | |||||||||||||||||
Non-GAAP | $ | (4,977 | ) | $ | (0.14 | ) | $ | 16,518 | $ | 16,901 | $ | 33,419 | $ | 38,173 | |||||||||||
Gross Margin | |||||||||||||||||||||||||
Gross margin on a GAAP basis | 21.5 | % | 44.3 | % | 29.0 | % | |||||||||||||||||||
Gross margin on a Non-GAAP basis | 22.0 | % | 46.1 | % | 29.9 | % | |||||||||||||||||||
Weighted average shares used in computing: | |||||||||||||||||||||||||
Basic and diluted net loss per share | 34,420 | ||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||
Net | Gross Profit | Operating | |||||||||||||||||||||||
Loss | EPS | Product | Service | Total | Expenses | ||||||||||||||||||||
GAAP | $ | (9,612 | ) | $ | (0.28 | ) | $ | 16,262 | $ | 15,536 | $ | 31,798 | $ | 39,328 | |||||||||||
Share-based compensation | (1) | 2,983 | 0.09 | 78 | 293 | 371 | (2,612 | ) | |||||||||||||||||
Amortization and impairment of acquired intangibles | (1) | 223 | 0.01 | 205 | - | 205 | (18 | ) | |||||||||||||||||
Restructuring and severance | (2) | 722 | 0.02 | - | 4 | 4 | (718 | ) | |||||||||||||||||
Other non-recurring items | (2) | 1,372 | 0.04 | - | 121 | 121 | (1,251 | ) | |||||||||||||||||
Non-GAAP | $ | (4,312 | ) | $ | (0.12 | ) | $ | 16,545 | $ | 15,954 | $ | 32,499 | $ | 34,729 | |||||||||||
Gross Margin | |||||||||||||||||||||||||
Gross margin on a GAAP basis | 13.7 | % | 45.3 | % | 20.8 | % | |||||||||||||||||||
Gross margin on a Non-GAAP basis | 13.9 | % | 46.5 | % | 21.3 | % | |||||||||||||||||||
Weighted average shares used in computing: | |||||||||||||||||||||||||
Basic and diluted net loss per share | 34,839 | ||||||||||||||||||||||||
NOTE: This presentation includes certain financial measures not in conformity with Generally Accepted Accounting Principles in | ||||
(1) | Adjustments to exclude certain non-cash expenses such as share-based compensation and amortization and impairment of intangible assets. | |||
(2) | Adjustments to exclude the items discussed below because such items are either operating expenses which would not otherwise have been incurred by the company in the normal course of the company's business operations or are not reflective of the company's core results over time. These items may include recurring as well as non-recurring items. | |||
(a) | Restructuring charges and severance - Restructuring charges consist primarily of severance expense, facility closure and relocation costs. | |||
(b) | Other non-recurring items include settlements, asset impairments, and other non-recurring items. | |||
TRENDED FINANCIAL DATA | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Q1 FY16 | Q1 FY15 | |||||||||
Revenue | ||||||||||
$ | 80,459 | $ | 67,670 | |||||||
APJ | 20,305 | 26,418 | ||||||||
EMEA | 25,543 | 17,613 | ||||||||
Total revenue | $ | 126,307 | $ | 111,701 | ||||||
Revenue | ||||||||||
Federal (*) | $ | 72,455 | $ | 60,674 | ||||||
International / Commercial | 53,852 | 51,027 | ||||||||
Total revenue | $ | 126,307 | $ | 111,701 | ||||||
Revenue | ||||||||||
Product | $ | 94,090 | $ | 75,002 | ||||||
Service | 32,217 | 36,699 | ||||||||
Total revenue | $ | 126,307 | $ | 111,701 | ||||||
Cost of revenue | ||||||||||
Product | $ | 79,910 | $ | 58,893 | ||||||
Service | 17,933 | 20,436 | ||||||||
Total cost of revenue | $ | 97,843 | $ | 79,329 | ||||||
Gross margin by Product and Service | ||||||||||
Product Gross Margin | 15.1 | % | 21.5 | % | ||||||
Service Gross Margin | 44.3 | % | 44.3 | % | ||||||
Total gross margin | 22.5 | % | 29.0 | % | ||||||
(*) Federal revenue includes U.S. government customers, system integrators, and higher education and research institutions | ||||||||||
Contact Information:
SGI Investor Relations
(415) 775-1788
Email Contact
(669) 900-8090
Email Contact
Source: SGI
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