MILPITAS, CA -- (Marketwired - August 11, 2016) - SGI (NASDAQ: SGI), a global leader in high-performance solutions for compute, data analytics and data management, today announced financial results for its fourth quarter and fiscal year 2016 ended June 24, 2016. Data in this release is presented on both a GAAP and non-GAAP basis and a reconciliation of GAAP to non-GAAP measures is included in the financial tables in this press release.
Total revenue for the fiscal fourth quarter was $123 million compared to $153 million in the fourth quarter of fiscal 2015. GAAP net income for the fiscal fourth quarter was $0.1 million, or breakeven per share compared with a net loss of $10 million, or $(0.28) per share in the fourth quarter of fiscal year 2015. Non-GAAP net income for the fiscal fourth quarter was $3 million, or $0.08 per share compared with a net loss of $4 million, or $(0.12) per share in the same quarter a year ago.
Total revenue for fiscal 2016 was $533 million compared with $521 million in fiscal 2015. GAAP net loss for fiscal 2016 was $11 million, or $(0.31) per share compared with a net loss of $39 million, or $(1.13) per share in fiscal 2015. Non-GAAP net income was $4 million, or $0.11 per share for fiscal 2016, compared with a net loss of $13 million, or $(0.36) per share for fiscal 2015.
Conference Call and Webcast Information
Due to the earlier announcement of Hewlett Packard Enterprise's acquisition of SGI, the previously scheduled conference call has been cancelled.
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 (sgi.com/) for more information.
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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) gains or losses on sale of assets; and (5) 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 SEC filings.
For a full reconciliation of historical non-GAAP measures referenced in this press release to the comparable measures under GAAP, please refer to the company's press releases on its website at www.sgi.com.
Silicon Graphics International Corp. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Three Months Ended Year Ended -------------------- -------------------- June 24, June 26, June 24, June 26, 2016 2015 2016 2015 --------- --------- --------- --------- Revenue $ 122,714 $ 152,904 $ 532,930 $ 521,259 Cost of revenue 85,226 121,106 388,385 386,621 --------- --------- --------- --------- Gross profit 37,488 31,798 144,545 134,638 --------- --------- --------- --------- Operating expenses: Research and development 11,786 12,211 50,697 53,206 Sales and marketing 12,823 14,655 51,525 61,544 General and administrative 11,123 12,462 43,435 53,861 Restructuring - - - 116 --------- --------- --------- --------- Total operating expenses 35,732 39,328 145,657 168,727 --------- --------- --------- --------- Income (loss) from operations 1,756 (7,530) (1,112) (34,089) --------- --------- --------- --------- Interest expense, net (1,888) (2,030) (7,932) (3,744) Other expense, net (1,385) (193) (2,760) (872) --------- --------- --------- --------- Total other expense, net (3,273) (2,223) (10,692) (4,616) --------- --------- --------- --------- Loss before income taxes (1,517) (9,753) (11,804) (38,705) Income tax (benefit) provision (1,651) (141) (626) 440 --------- --------- --------- --------- Net income (loss) $ 134 $ (9,612) $ (11,178) $ (39,145) ========= ========= ========= ========= Basic net income (loss) per share $ 0.00 $ (0.28) $ (0.31) $ (1.13) ========= ========= ========= ========= Diluted net income (loss) per share $ 0.00 $ (0.28) $ (0.31) $ (1.13) ========= ========= ========= ========= Shares used in computing basic net income (loss) per share 36,319 34,839 35,745 34,559 ========= ========= ========= ========= Shares used in computing diluted net income (loss) per share 37,379 34,839 35,745 34,559 ========= ========= ========= ========= Share-based compensation by category is as follows: Cost of revenue - product $ 67 $ 78 $ 384 $ 452 Cost of revenue - service 213 293 1,238 1,510 Research and development 364 437 2,132 2,318 Sales and marketing 299 489 1,675 2,771 General and administrative 1,072 1,686 6,608 7,498 --------- --------- --------- --------- Total $ 2,015 $ 2,983 $ 12,037 $ 14,549 ========= ========= ========= ========= Silicon Graphics International Corp. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 24, June 26, 2016 2015 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 92,946 $ 67,191 Current portion of restricted cash 2,109 2,109 Accounts receivable, net 85,834 118,219 Inventories 55,911 82,832 Current portion of deferred cost of revenue 15,453 12,108 Prepaid expenses and other current assets 11,698 17,547 ------------ ------------ Total current assets 263,951 300,006 Non-current portion of restricted cash 1,360 2,251 Property and equipment, net 40,526 38,480 Goodwill and Intangible assets, net 10,610 11,303 Non-current portion of deferred cost of revenue 11,459 9,648 Other non-current assets 28,223 25,896 ------------ ------------ Total assets $ 356,129 $ 387,584 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 55,761 $ 48,677 Accrued compensation 15,849 17,797 Short-term debt, net of unamortized debt issuance costs 3,776 3,096 Current portion of deferred revenue 64,392 96,473 Other current liabilities 27,605 33,180 ------------ ------------ Total current liabilities 167,383 199,223 Long-tem debt, net of unamortized debt issuance costs 60,722 65,581 Non-current portion of deferred revenue 46,619 43,781 Long-term income taxes payable 7,529 8,420 Retirement benefit obligations 10,868 9,330 Other non-current liabilities 7,818 7,871 ------------ ------------ Total liabilities 300,939 334,206 Stockholders' equity 55,190 53,378 ------------ ------------ Total liabilities and stockholders' equity $ 356,129 $ 387,584 ============ ============ Silicon Graphics International Corp. RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (In thousands, except per share data) (Unaudited) Three Months Ended --------------------------------------------------------- June 24, 2016 Net Gross Profit Operating ---------------------------- Income EPS Product Service Total Expenses ------- ------- -------- -------- -------- --------- GAAP $ 134 $ 0.00 $ 23,626 $ 13,862 $ 37,488 $ 35,732 Share-based (1) compensation 2,015 0.05 67 213 280 (1,735) Amortization (1) of acquired intangibles 187 0.01 175 - 175 (12) Severance (2) 163 - - 123 123 (40) Other non- (2) recurring items 589 0.02 - 9 9 (580) ------- ------- -------- -------- -------- --------- Non-GAAP $ 3,088 $ 0.08 $ 23,868 $ 14,207 $ 38,075 $ 33,365 ======= ======= ======== ======== ======== ========= Gross Margin Gross margin on a GAAP basis 26.4% 41.5% 30.5% Gross margin on a Non- GAAP basis 26.7% 42.6% 31.0% Weighted average shares used in computing: Basic net income per share 36,319 Diluted net income per share 37,379 Three Months Ended --------------------------------------------------------- June 26, 2015 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 (1) compensation 2,983 0.09 78 293 371 (2,612) Amortization (1) of acquired intangibles 223 0.01 205 - 205 (18) Severance (2) 722 0.02 - 4 4 (718) Other non- (2) recurring items 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 Three Months Ended --------------------------------------------------------- March 25, 2016 Net Gross Profit Operating ---------------------------- Income EPS Product Service Total Expenses ------- ------- -------- -------- -------- --------- GAAP $ 739 $ 0.02 $ 22,137 $ 15,631 $ 37,768 $ 32,853 Share-based (1) compensation 2,948 0.08 110 295 405 (2,543) Amortization (1) of acquired intangibles 191 - 175 - 175 (16) Severance (2) 723 0.02 5 - 5 (718) Other non- (2) recurring items (3,485) (0.09) - (21) (21) 3,442 ------- ------- -------- -------- -------- --------- Non-GAAP $ 1,116 $ 0.03 $ 22,427 $ 15,905 $ 38,332 $ 33,018 ======= ======= ======== ======== ======== ========= Gross Margin Gross margin on a GAAP basis 23.0% 43.8% 28.6% Gross margin on a Non- GAAP basis 23.3% 44.6% 29.0% Weighted average shares used in computing: Basic net income per share 35,954 Diluted net income per share 37,028 Silicon Graphics International Corp. RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (In thousands, except per share data) (Unaudited) Year Ended ---------------------------------------------------------- June 24, 2016 Net Gross Profit Operating ---------------------------- (Loss) / Income EPS Product Service Total Expenses -------- ------- -------- -------- -------- --------- GAAP $(11,178) $ (0.31) $ 85,577 $ 58,968 $144,545 $ 145,657 Share-based (1) compensation 12,037 0.34 384 1,238 1,622 (10,415) Amortization (1) of acquired intangibles 662 0.02 600 - 600 (62) Severance (2) 2,560 0.07 5 246 251 (2,309) Other non- (2) recurring items (217) (0.01) - (1) (1) 194 -------- ------- -------- -------- -------- --------- Non-GAAP $ 3,864 $ 0.11 $ 86,566 $ 60,451 $147,017 $ 133,065 ======== ======= ======== ======== ======== ========= Gross Margin Gross margin on a GAAP basis 21.7% 42.7% 27.1% Gross margin on a Non- GAAP basis 21.9% 43.8% 27.6% Weighted average shares used in computing: Basic net loss per share 35,745 Diluted net income per share 36,445 Year Ended ---------------------------------------------------------- June 26, 2015 Net Gross Profit Operating ---------------------------- Loss EPS Product Service Total Expenses -------- ------- -------- -------- -------- --------- GAAP $(39,145) $ (1.13) $ 72,522 $ 62,116 $134,638 $ 168,727 Share-based (1) compensation 14,549 0.42 453 1,509 1,962 (12,587) Amortization (1) and impairment of acquired intangibles 1,854 0.06 1,324 - 1,324 (530) Restructuring(2) and severance 6,314 0.18 160 1,456 1,616 (4,698) Other non- (2) recurring items 3,878 0.11 - 199 199 (3,449) -------- ------- -------- -------- -------- --------- Non-GAAP $(12,550) $ (0.36) $ 74,459 $ 65,280 $139,739 $ 147,463 ======== ======= ======== ======== ======== ========= Gross Margin Gross margin on a GAAP basis 19.3% 42.8% 25.8% Gross margin on a Non- GAAP basis 19.8% 45.0% 26.8% Weighted average shares used in computing: Basic and diluted net loss per share 34,559 NOTE: This presentation includes certain financial measures not in conformity with Generally Accepted Accounting Principles in the United States (non-GAAP measures). Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. (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, sale of assets, and other non-recurring items. Silicon Graphics International Corp. TRENDED FINANCIAL DATA (In thousands) (Unaudited) Q4 FY16 Q4 FY15 FY16 FY15 ------------------------------------------ ---------- ---------- ---------- Revenue Americas $ 78,391 $ 95,915 $ 295,518 $ 323,785 APJ 25,138 31,919 129,973 124,163 EMEA 19,185 25,070 107,439 73,311 ------------------------------------------ ---------- ---------- ---------- Total revenue $ 122,714 $ 152,904 $ 532,930 $ 521,259 ========================================== ========== ========== ========== Revenue Federal (*) $ 53,134 $ 89,803 $ 231,657 $ 279,906 International / Commercial 69,580 63,101 301,273 241,353 ------------------------------------------ ---------- ---------- ---------- Total revenue $ 122,714 $ 152,904 $ 532,930 $ 521,259 ========================================== ========== ========== ========== Revenue Product $ 89,326 $ 118,606 $ 394,844 $ 376,294 Service 33,388 34,298 138,086 144,965 ------------------------------------------ ---------- ---------- ---------- Total revenue $ 122,714 $ 152,904 $ 532,930 $ 521,259 ========================================== ========== ========== ========== Cost of revenue Product $ 65,700 $ 102,344 $ 309,267 $ 303,772 Service 19,526 18,762 79,118 82,849 ------------------------------------------ ---------- ---------- ---------- Total cost of revenue $ 85,226 $ 121,106 $ 388,385 $ 386,621 ========================================== ========== ========== ========== Gross margin by Product and Service Product Gross Margin 26.4% 13.7% 21.7% 19.3% Service Gross Margin 41.5% 45.3% 42.7% 42.8% Total gross margin 30.5% 20.8% 27.1% 25.8% ========================================== ========== ========== ========== (*) Federal revenue includes U.S. government customers, system integrators, and higher education and research institutions
Contact Information: SGI Investor Relations Annie Leschin (415) 775-1788 annie@streetsmartir.com Ben Liao (669) 900-8090 bliao@sgi.com