SGI Reports Fourth Quarter and Fiscal Year 2013 Financial Results

SGI Reports Fourth Quarter and Fiscal Year 2013 Financial Results 
FREMONT, CA -- (Marketwired) -- 08/07/13 --  SGI (NASDAQ: SGI), the
trusted leader in technical computing and Big Data, today reported
financial results for its fiscal fourth quarter and year ended June
28, 2013.  
Total revenue for the fiscal fourth quarter was $171 million, which
compares with $233 million in the previous quarter and $179 million
in the fiscal fourth quarter of 2012. For fiscal year 2013, total
revenue was $767 million, an increase of 2% from $753 million in
fiscal year 2012. 
GAAP net loss for the fiscal fourth quarter was $4 million, or
$(0.13) per diluted share, which compares with net income of $9
million, or $0.27 per diluted share, in the prior quarter, and a net
loss of $18 million, or $(0.58) per diluted share, in the fourth
quarter of fiscal 2012. Non-GAAP net income for the quarter was $6
million, or $0.17 per diluted share, which compares with non-GAAP net
income of $6 million, or $0.18 per diluted share, in the prior
quarter and a non-GAAP net loss of $3 million, or $(0.10) per diluted
share, in the year-ago period.  
For fiscal year 2013, GAAP net loss was $3 million, or $(0.09) per
diluted share, which compares with a net loss of $24 million, or
$(0.77) per diluted share in fiscal 2012. On a non-GAAP basis, the
company reported full-year net income of $12 million, or $0.36 per
diluted share, which compares with net income of $4 million, or $0.12
per diluted share in fiscal 2012.  
A reconciliation of the company's GAAP to non-GAAP results is
included in the tables accompanying this press release.  
Cash as of the end of the fiscal fourth quarter was $179 million,
which compares with $153 million for the prior quarter and $94
million (net of debt outstanding) as of the same period a year ago.  
"We achieved another solid financial quarter, capping a year in which
we tripled non-GAAP net income and nearly doubled the company's net
cash balance, while repositioning SGI for more profitable growth in
fiscal 2014," said Jorge Titinger, president and CEO of SGI. "In
fiscal year 2014, we expect to achieve solid double-digit revenue
growth in our core high-performance computing (HPC), storage, and Big
Data solutions, while managing the run-off of our l
ower margin legacy
cloud infrastructure business. We are on track with our operational
and financial objectives for the year, including further improvement
in profitability, however because of the timing of many large deal
opportunities as well as the ramp of new products, we expect our
financial performance to be weighted toward the second half of the
fiscal year." 
Recent Highlights 


 
--  SGI announced on August 5 that SKODA Auto has selected SGI(R) ICE X
    and SGI(R) UV(TM) 2000 computing systems to augment its
    computer-aided engineering (CAE) system. The new systems allow
    engineers to reduce processing time and improve design efficiency,
    quality and safety, speeding up the development process and making it
    even more cost effective.
--  On July 1, SGI selected Jabil as its primary global manufacturing
    services and supply chain management provider, subject to completion
    of definitive agreements.
--  Princeton University announced on June 24 that it deployed SGI
    Rackable(R) servers in the Department of Geosciences to drive
    next-generation earthquake research.
--  On June 17, SGI announced that the United States Department of Defense
    (DoD) has deployed the SGI ICE X HPC system for its supercomputer
    Spirit, making it the 14th fastest supercomputer in the world
    according to TOP500 (www.top500.org).
--  Translational Research Institute (TRI) in Australia announced on June
    4 that it has selected SGI to provide a big data HPC solution powered
    by SGI UV 2000 shared memory platform, SGI(R) Rackable clusters and
    SGI(R) InfiniteStorage(TM) to accelerate results at its new
    state-of-the-art research center.
--  On May 23, NASA's Ames Research Center announced that it has selected
    an SGI UV 2000 shared memory system to support more than a thousand
    active users around the country who are doing research for earth
    sciences, space and aeronautics missions.
--  CQUniversity Australia announced on May 6 that it has selected SGI to
    supply new HPC server and storage infrastructure to accelerate its
    research projects. With the deployment of the SGI Rackable HPC system,
    CQUniversity can now analyze, store and process big data in record
    time, increasing ROI and results for healthcare and environmental
    projects.

  
Outlook for Fiscal Q1 2014
 The company provides technical computing
solutions to large government, public, and commercial customers. Any
given customer deal can include a varying mix of compute and storage
hardware, software, and services, and generally will carry terms that
result in most of the product revenue associated with the deal being
recognized upon final shipment or acceptance of the system. The
timing of final delivery or acceptance of large deals is difficult to
predict and can cause significant swings in quarterly revenue.
Management provides guidance on quarterly revenue and other items
based on its current expectations of the timing of revenue and
associated costs; however there can be no assurance that revenues and
associated costs will be recognized according to expected schedules
and management assumes no obligation to update its guidance if the
timing of revenues or other circumstances in the business differ from
current expectations.  
For the first quarter ending September 27, 2013, the company is
providing the following guidance: 


 
--  Revenue for the first fiscal quarter is expected to be $160 million to
    $170 million.
--  GAAP net loss per diluted share for the first fiscal quarter is
    expected to be $(0.14) to $(0.07) and is expected to reflect
    approximately $7 million of total adjustments, including restructuring
    and severance charges, stock-based compensation expense, and
    intangibles amortization.
--  Non-GAAP net income per diluted share for the first fiscal quarter is
    expected to be $0.07 to $0.14 and is expected to exclude the $7
    million of total adjustments mentioned above.

  
Alive webcast of the earnings conference call will be available on the
Investor Relations section of SGI'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 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: 18057562. 
About SGI
 SGI, the trusted leader in technical computing, is focused
on helping customers solve their most demanding business and
technology challenges. Visit www.sgi.com for more information. 
Connect with SGI on Twitter (@sgi_corp), YouTube
(youtube.com/sgicorp), Facebook (facebook.com/sgiglobal) and
LinkedIn. 
Cautionary Statement Regarding Forward Looking Statements 
 The
statements made in this press release regarding projected financial
results, 
financial objectives, and strategic plans, including SGI's
2014 first fiscal quarter financial guidance, anticipated growth and
profitability, 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 uncertainties, including, but not limited to:  


 
--  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;
--  Customer concentration risks;
--  Substantial sales to U.S. government entities, which are subject to
    the government's budgetary constraints;
--  Write-offs of excess and obsolete inventory;
--  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; and
--  Market acceptance of newer products.

  
In addition, SGI's actual revenue, earnings per share and other
projections on a GAAP and non-GAAP basis for the fiscal quarter
ending September 27, 2013 could differ materially from the targets
stated under "Outlook for Fiscal Q1 2014" above for a number of
reasons, including, but not limited to (i) application of the actual
consolidated GAAP and non-GAAP tax rates for such periods, or
judgment by management to increase or decrease an income tax asset or
liability, (ii) a determination by SGI that any portion of its
goodwill or intangible assets have become impaired, (iii) changes in
the anticipated amount of employee stock-based compensation expense
recognized on SGI's financial statements, (iv) increases or decreases
to estimated capital expenditures, (v) changes driven by new
accounting or tax rules, regulations, interpretations or guidance,
(vi) changes in the anticipated amounts and timing of restructuring
charges to be incurred and cost savings expected to be realized from
our restructuring actions in Europe, (vii) charges or gains resulting
from litigation or dispute settlement, and (viii) other risks as
detailed in SGI's filings with the Securities and Exchange Commission
("SEC"), including those described in SGI's Annual Report on Form
10-K under the caption "Risk Factors" filed with the SEC on Sept. 10,
2012, which are available at the SEC's web site at
http://www.sec.gov. You are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date of this
announcement. SGI undertakes no obligation to update the information
in this earnings release or the related earnings conference call,
whether as a result of new information, future events or otherwise,
unless otherwise required by law. 
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. general accepted accounting
principles ("GAAP"), including non-GAAP gross profit and gross
margin, non-GAAP operating expenses, 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
excludes the following items from one or more of non-GAAP measures:
(1) share-based compensation; (2) amortization of intangible assets;
(3) restructuring and severance charges; and (4) other non-recurring
costs, including settlements and other items. These measures are
adjusted as described in the reconciliation of GAAP and non-GAAP
numbers at the end of this release, but these adjustments should not
be construed as an inference that all of these adjustments or costs
are unusual, infrequent or non-recurring.  
In addition, management uses these non-GAAP financial measures to
facilitate its review of the comparability of SGI's core operating
performance on a period to period basis as well as to better
understand the fundamental economics of a specific period's
operational and financial performance. Management uses this view of
SGI's operating performance for purposes of comparison with its
business plan and individual operating budgets and allocations of
resources.  
Management also believes that the non-GAAP financial measures provide
additional insight for analysts and investors in evaluating SGI's
financial and operational performance in the same way that management
evaluates the company's financial performance. However, these
non-GAAP financial measures have limitations as an analytical tool,
as they exclude the financial impact of transactions necessary or
advisable for the conduct of SGI's business, such as the granting of
equity compensation awards and are not intended to be an alternative
to financial measures prepared in accordance with GAAP. Hence, to
compensate for these limitations, management does not review these
non-GAAP financial metrics in isolation from its GAAP results, nor
should investors. Pursuant to the requirements of SEC Regulation G, a
detailed reconciliation between SGI's GAAP and non-GAAP financial
results is provided at the end of this press release. Investors are
advised to carefully review and consider this information as well as
the GAAP financial results that are disclosed in SGI's SEC filings. 
Copyright 2013 SGI. SGI and its product names and logos are
trademarks or registered trademarks of Silicon Graphics International
Corp. or its subsidiaries in the United States and/or other
countries. All other trademarks are property of their respective
holders. 


 
                                                                            
                                                                            
                    Silicon Graphics International Corp.                    
         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS          
                  (In thousands, except per share amounts)                  
                                                                            
                                                                            
                                  Three Months Ended    Twelve Months Ended 
                                 --------------------  -------------------- 
        
                          June 28,   June 29,   June 28,   June 29, 
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
                                                                            
Revenue                          $ 170,532  $ 179,488  $ 767,227  $ 752,987 
Cost of revenue                    123,746    142,002    578,175    559,170 
                                 ---------  ---------  ---------  --------- 
                                                                            
Gross profit                        46,786     37,486    189,052    193,817 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating expenses:                                                         
  Research and development          15,594     14,929     60,611     62,356 
  Sales and marketing               19,671     21,692     78,730     88,414 
  General and administrative        12,821     14,161     54,317     62,021 
  Restructuring                      3,967      2,340      9,048      2,469 
                                 ---------  ---------  ---------  --------- 
    Total operating expenses        52,053     53,122    202,706    215,260 
                                 ---------  ---------  ---------  --------- 
                                                                            
Loss from operations                (5,267)   (15,636)   (13,654)   (21,443)
                                 ---------  ---------  ---------  --------- 
                                                                            
  Interest income (expense), net       (33)      (147)      (311)      (297)
  Other income (expense), net         (225)    (1,490)    (1,478)    (1,720)
                                 ---------  ---------  ---------  --------- 
    Total other income (expense),                                           
     net                              (258)    (1,637)    (1,789)    (2,017)
                                 ---------  ---------  ---------  --------- 
Loss before income taxes            (5,525)   (17,273)   (15,443)   (23,460)
Income tax (benefit) provision      (1,060)     1,113    (12,623)     1,001 
                                                                            
                                 ---------  ---------  ---------  --------- 
Net loss                         $  (4,465) $ (18,386) $  (2,820) $ (24,461)
                                 =========  =========  =========  ========= 
                                                                            
Basic and diluted net loss per                                              
 share                           $   (0.13) $   (0.58) $   (0.09) $   (0.77)
                                 =========  =========  =========  ========= 
                                                                            
Shares used in computing basic                                              
 and diluted net loss per share     33,859     31,947     32,909     31,653 
                                 =========  =========  =========  ========= 
                                                                            
Share-based compensation by                                                 
 category is as follows:                                                    
Cost of revenue                  $     336  $     323  $   1,598  $   1,358 
Research and development               504        390      2,250      1,938 
Sales and marketing                    347        312      1,629      1,570 
General and administrative           1,097      1,111      4,623      5,195 
                                 ---------  ---------  ---------  --------- 
Total                            $   2,284  $   2,136  $  10,100  $  10,061 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            

 
                                                                            
                                                                            
                    Silicon Graphics International Corp.                    
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS              
                               (In thousands)                               
                                                                            
                                                      June 28,     June 29, 
                                                        2013         2012   
                                                    -----------  -----------
                       ASSETS                                               
Current assets:                                                             
  Cash and cash equivalents                         $   175,181  $   104,851
  Current portion of restricted cash                        531          980
  Accounts receivable, net                               59,842       98,293
  Inventories                                            61,770      123,391
  Deferred cost of revenue                               21,204       49,407
  Prepaid expenses and other current assets              14,094       18,443
                                                    -----------  -----------
    Total current assets                                332,622      395,365
Non-current portion of restricted cash                    2,853        3,088
Property and equipment, net                              26,170       27,404
Intangible assets, net                                    4,643        8,675
Non-current portion of deferred cost of revenue           7,281       17,466
Other assets                                             34,284       44,882
                                                    -----------  -----------
      Total assets                                  $   407,853  $   496,880
                                                    ===========  ===========
                                                                            
        LIABILITIES AND STOCKHOLDERS' EQUITY                                
Current liabilities:                                                        
  Accounts payable                                  $    51,531  $    69,448
  Credit facility                                             -       15,200
  Accrued compensation                                   28,504       24,246
  Other current liabilities                              35,364       48,587
  Current portion of deferred revenue                    86,357      124,924
                                                    -----------  -----------
    Total current liabilities                           201,756      282,405
Non-current portion of deferred revenue                  50,362       64,717
Long-term income taxes payable                           10,149       20,568
Retirement benefit obligations                           11,542       11,484
Other non-current liabilities                             3,790        6,814
                                                    -----------  -----------
    Total liabilities                                   277,599      385,988
                                                                            
Stockholders' equity                                    130,254      110,892
                                                    -----------  -----------
      Total liabilities and stockholders' equity    $   407,853  $   496,880
                                                    ===========  ===========
                                                                            
 
                                                                            
                                                                            
                    Silicon Graphics International Corp.                    
        RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES       
                    (In thousands, except per share data)                   
                                 (Unaudited)                                
                                                                            
                                          Three Months Ended                
                           ------------------------------------------------ 
                                             June 28, 2013                  
                                                                            
                              Net                                           
                            (Loss)               Gross   Gross    Operating 
                            Income      EPS     Profit   Margin   Expenses  
                           --------  --------  -------- -------  ---------- 
GAAP                       $ (4,465) $  (0.13) $ 46,786      27% $   52,053 
                                                                            
  Share-based                                                               
   compensation in cost                                                     
   of revenue           (1)     336      0.01       336       0%          - 
  Share-based                                                               
   compensation in                                                          
   operating expenses   (1)   1,948      0.06         -       -      (1,948)
  Amortization of                                                           
   intangibles in cost                                                      
   of revenue           (1)     255      0.01       255       0%          - 
  Amortization of                                                           
   intangibles in                                                           
   operating expenses   (1)     615      0.02         -       -        (615)
  Restructuring and                                                         
   severance in cost of                                                     
   revenue              (2)     872      0.02       872       1%          - 
  Restructuring and                                                         
   severance in                                                             
   operating expenses   (2)   5,936      0.17         -       -      (5,936)
  Other non-recurring                                                       
   items in cost of                                                         
   revenue              (2)     161         -       161       0%          - 
  Other non-recurring                                                       
   items in operating                                                       
   expenses             (2)     220      0.01         -       0%       (220)
  Canada tax benefits   (2)       -         -         -       -           - 
                           --------  --------  -------- -------  ---------- 
Non-GAAP                   $  5,878  $   0.17  $ 48,410      28% $   43,334 
                           ========  ========  ======== =======  ========== 
                                                                            
Weighted average shares                                                     
 used in computing:                                                         
    Basic net income                                                        
     (loss) per share                  33,859                               
    Dilutive net income                                                     
     (loss) per share                  35,000                               
 
                                                                          
                                        Twelve Months Ended               
                         ------------------------------------------------ 
                                           June 28, 2013                  
                                                                          
                            Net                                           
                          (Loss)               Gross   Gross    Operating 
                          Income      EPS     Profit   Margin   Expenses  
                         --------  --------  -------- -------  ---------- 
GAAP                     $ (2,820) $  (0.09) $189,052      25% $  202,706 
                                                                          
  Share-based                                                             
   compensation in cost                                                   
   of revenue               1,598      0.05     1,598       0%          - 
  Share-based                                                             
   compensation in                                                        
   operating expenses       8,502      0.25         -       -      (8,502)
  Amortization of                                                         
   intangibles in cost                                                    
   of revenue               1,033      0.03     1,033       0%          - 
  Amortization of                                                         
   intangibles in                                                         
   operating expenses       2,676      0.08         -       -      (2,676)
  Restructuring and                                                       
   severance in cost of                                                   
   revenue                  1,865      0.06     1,865       0%          - 
  Restructuring and                                                       
   severance in                                                           
   operating expenses      12,100      0.36         -       -     (12,100)
  Other non-recurring                                                     
   items in cost of                                                       
   revenue                    161         -       161       0%          - 
  Other non-recurring                                                     
   items in operating                                                     
   expenses                  (218)    (0.01)        -       -         218 
  Canada tax benefits     (12,736)    (0.37)        -       -           - 
                         --------  --------  -------- -------  ---------- 
Non-GAAP                 $ 12,161  $   0.36  $193,709      25% $  179,646 
                         ========  ========  ======== =======  ========== 
                                                                          
Weighted average shares                                                   
 used in computing:                                                       
    Basic net income                                                      
     (loss) per share                32,909                               
    Dilutive net income                                                   
     (loss) per share                33,814                               
                                                                            
                                         Three Months Ended                 
                         -------------------------------------------------- 
                                            June 29, 2012                   
                                                                            
                            Net                Gross    Gross     Operating 
                           Loss       EPS     Profit    Margin    Expenses  
                         --------  --------  --------  -------   ---------- 
GAAP        
             $(18,386) $  (0.58) $ 37,486       21%  $   53,122 
                                                                            
  Share-based                                                               
   compensation in                                                          
   cost of revenue    (1)     323      0.01       323        0%           - 
  Share-based                                                               
   compensation in                                                          
   operating expenses (1)   1,813      0.06         -        -       (1,813)
  Amortization of                                                           
   intangibles in cost                                                      
   of revenue         (1)     371      0.01       371        0%           - 
  Amortization of                                                           
   intangibles in                                                           
   operating expenses (1)     696      0.03         -        -         (696)
  Restructuring and                                                         
   severance in cost                                                        
   of revenue         (2)     148         -       148        0%           - 
  Restructuring and                                                         
   severance in                                                             
   operating expenses (2)   2,811      0.09         -        0%      (2,811)
  Excess and obsolete                                                       
   inventory write-off                                                      
   in cost of revenue (2)  10,135      0.32    10,135        6%           - 
  Other non-recurring                                                       
   items in costs of                                                        
   revenue            (2)  (1,222)    (0.04)   (1,222)      (1)%          - 
  Other non-recurring                                                       
   items in operating                                                       
   expenses           (2)       -         -         -        0%           - 
                         --------  --------  --------  -------   ---------- 
Non-GAAP                 $ (3,311) $  (0.10) $ 47,241       26%  $   47,802 
                         ========  ========  ========  =======   ========== 
                                                                            
Weighted average                                                            
 shares used in                                                             
 computing:                                                                 
    Basic net income                                                        
     (loss) per share                31,947                                 
    Dilutive net                                                            
     income (loss) per                                                      
     share                           31,947                                 
                                                                            
 
                                                                         
                                      Twelve Months Ended                
                       ------------------------------------------------- 
                                         June 29, 2012                   
                                                                         
                          Net                                            
                        (Loss)               Gross    Gross    Operating 
                        Income      EPS     Profit    Margin   Expenses  
                       --------  --------  --------  -------  ---------- 
GAAP                   $(24,461) $  (0.77) $193,817       26% $  215,260 
                                                                         
  Share-based                                                            
   compensation in                                                       
   cost of revenue        1,358      0.04     1,358        0%          - 
  Share-based                                                            
   compensation in                                                       
   operating expenses     8,703      0.28         -        0%     (8,703)
  Amortization of                                                        
   intangibles in cost                                                   
   of revenue             1,736      0.05     1,736        0%          - 
  Amortization of                                                        
   intangibles in                                                        
   operating expenses     3,454      0.11         -        0%     (3,454)
  Restructuring and                                                      
   severance in cost                                                     
   of revenue               148      0.00       148        0%          - 
  Restructuring and                                                      
   severance in                                                          
   operating expenses     2,944      0.10         -        0%     (2,944)
  Excess and obsolete                                                    
   inventory write-off                                                   
   in cost of revenue    10,135      0.32    10,135        1%          - 
  Other non-recurring                                                    
   items in costs of                                                     
   revenue               (1,222)    (0.04)   (1,222)       0%          - 
  Other non-recurring                                                    
   items in operating                                                    
   expenses               1,000      0.03         -        0%     (1,000)
                       --------  --------  --------  -------  ---------- 
Non-GAAP               $  3,795  $   0.12  $205,972       27% $  199,159 
                       ========  ========  ========  =======  ========== 
                                                                         
Weighted average                                                         
 shares used in                                                          
 computing:                                                              
    Basic net income                                                     
     (loss) per share              31,653                                
    Dilutive net                                                         
     income (loss) per                                                   
     share                         31,653                                
                                                                         

 
                                                                            
                                          Three Months Ended                
                          ------------------------------------------------- 
                                            March 29, 2013                  
                                                                            
                             Net                Gross   Gross     Operating 
                           Income      EPS     Profit   Margin    Expenses  
                          --------  --------  -------- -------   ---------- 
GAAP                      $  9,224  $   0.27  $ 52,492      23%  $   51,006 
                                                                          - 
  Share-based                                                               
   compensation in                                                          
   cost of revenue     (1)     391      0.01       391       0%           - 
  Share-based                                                              
 
   compensation in                                                          
   operating expenses  (1)   2,418      0.07         -       -       (2,418)
  Amortization of                                                           
   intangibles in cost                                                      
   of revenue          (1)     255      0.01       255       0%           - 
  Amortization of                                                           
   intangibles in                                                           
   operating expenses  (1)     668      0.02         -       -         (668)
  Restructuring and                                                         
   severance in cost                                                        
   of revenue          (2)      98         -        98       0%           - 
  Restructuring and                                                         
   severance in                                                             
   operating expenses  (2)   1,646      0.05         -       -       (1,646)
  Other non-recurring                                                       
   items in operating                                                       
   expenses            (2)       -         -         -       -            - 
  Canada tax benefits  (2)  (8,447)    (0.25)        -       -            - 
                          --------  --------  -------- -------   ---------- 
Non-GAAP                  $  6,253  $   0.18  $ 53,236      23%  $   46,274 
                          ========  ========  ======== =======   ========== 
                                                                            
Weighted average                                                            
 shares used in                                                             
 computing:                                                                 
    Basic net income                                                        
     (loss) per share                 33,201                                
    Dilutive net                                                            
     income (loss) per                                                      
     share                            34,467                                
                                                                            
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 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 and other items         
                                                                            
                                                                            
                                                                            
           Silicon Graphics International Corp.                             
   RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP                     
                         MEASURES                                           
  GAAP to NON-GAAP EARNINGS BEFORE INTEREST, TAXES, AND                     
                AMORTIZATION & DEPRECIATION                                 
                      (In thousands)                                        
                       (Unaudited)                                          
                                                                            
                                           Three Months      Twelve Months  
                                               Ended             Ended      
                                         ----------------  ---------------- 
                                           June 28, 2013     June 28, 2013  
                                                                            
GAAP - Loss before income taxes          $         (5,525) $        (15,443)
                                                                            
  Adjustments of GAAP to Non-GAAP                                           
   earnings before income taxes (*)                10,343            27,717 
                                                                            
                                         ----------------  ---------------- 
Non - GAAP Income before income taxes               4,818            12,274 
                                         ----------------  ---------------- 
  Depreciation                                      2,719            10,560 
  Interest income                                     (45)             (208)
  Interest expense                                     78               519 
                                         ----------------  ---------------- 
Non-GAAP EBITDA                          $          7,570  $         23,145 
                                         ================  ================ 
                                                                            
                                                                            
                                                                            
                                           Three Months      Twelve Months  
                                               Ended             Ended      
                                         ----------------  ---------------- 
                                           June 29, 2012     June 29, 2012  
                                                                            
GAAP - Loss before income taxes          $        (17,273) $        (23,460)
                                                                            
  Adjustments of GAAP to Non-GAAP                                           
   earnings before income taxes (*)                15,075            28,256 
                                                                            
                                         ----------------  ---------------- 
Non - GAAP Loss before income taxes                (2,198)            4,796 
                                         ----------------  ---------------- 
  Depreciation                                      2,287             9,384 
  Interest income                                     (44)             (275)
  Interest expense                                    191               571 
                                         ----------------  ---------------- 
Non-GAAP EBITDA                          $            236  $         14,476 
                                         ================  ================ 
                                                                            
                                                                            
 
                                           Three Months                     
                                               Ended                        
                                         ----------------                   
                                          March 29, 2013                    
                                                                            
GAAP - Loss before income taxes          $          1,116                   
                                                                            
  Adjustments of GAAP to Non-GAAP                                           
   earnings before income taxes (*)                 5,476                   
                                                                            
                                         ----------------                   
Non - GAAP Income before income taxes               6,592                   
                                         ----------------                   
  Depreciation                                      2,666                   
  Interest income                                     (66)                  
  Interest expense                                     77                   
                                         ----------------                   
Non-GAAP EBITDA                          $          9,269                   
                                         ================                   
                                                                            
(*) Refer to the Reconciliation of GAAP to Non-GAAP net                     
 income (loss) for further details                                          
                                                                            
                                                                            
                                                                            
            SILICON GRAPHICS INTERNATIONAL CORP. AND SUBSIDIARIES           
                           TRENDED FINANCIAL DATA                           
                  (In thousands, except per share amounts)                  
                                 (Unaudited)                                
                                                                          
                                 Q1 FY12    Q2 FY12    Q3 FY12    Q4 FY12 
                                ---------  ---------  ---------  ---------
                                                                          
Revenue                                                                   
  Product Revenue               $ 128,952  $ 143,043  $ 150,239  $ 134,499
  Service Revenue                  49,943     52,171     49,151     44,989
                                ---------  ---------  ---------  ---------
    Total revenue               $ 178,895  $ 195,214  $ 199,390  $ 179,488
                                =========  =========  =========  =========
Cost of revenue                                                           
  Product                       $  99,767  $ 112,316  $ 121,263  $ 113,800
  Service                          26,489     30,715     26,617     28,202
                                ---------  ---------  ---------  ---------
    Total cost of revenue       $ 126,257  $ 143,031  $ 147,880  $ 142,002
                                =========  =========  =========  =========
Gross margin by Product and                                               
 Service                                                                  
  Product Gross Margin               22.6%      21.5%      19.3%      15.4
  Service Gross Margin               47.0%      41.1%      45.8%      37.3
                                ---------  ---------  ---------  ---------
    Total gross margin               29.4%      26.7%      25.8%      20.9
                                =========  =========  =========  =========
                                                                          
    Total operating expenses    $  55,006  $  54,131  $  53,001  $  53,122
                                =========  =========  =========  =========
                                                                          
Net (loss) income               $  (2,657) $  (2,256) $  (1,162) $ (18,386
                                =========  =========  =========  =========
                                                                          
Earnings per share                                                        
  Basic net (loss) income per                                             
   share                        $   (0.08) $   (0.07) $   (0.04) $   (0.58
  Diluted net (loss) income per                                           
   share                        $   (0.08) $   (0.07) $   (0.04) $   (0.58
                                =========  =========  =========  =========
Shares used in computing net                                              
 (loss) income per share                                                  
  Basic                            31,303     31,604     31,783     31,947
  Diluted                          31,303     31,604     31,783     31,947
                                ---------  ---------  ---------  ---------
                                                                          
                                                                          
 
                                                                            
                                  Q1 FY13    Q2 FY13    Q3 FY13    Q4 FY13  
                                 ---------  ---------  ---------  --------- 
                                                                            
Revenue                                                                     
  Product Revenue                $ 146,315  $ 128,040  $ 187,140  $ 129,194 
  Service Revenue                   46,566     43,186     45,448     41,338 
                                 ---------  ---------  ---------  --------- 
    Total revenue                $ 192,881  $ 171,226  $ 232,588  $ 170,532 
                                 =========  =========  =========  ========= 
Cost of revenue                                                             
  Product                        $ 122,597  $  97,350  $ 152,523  $  99,469 
  Service                           28,074     26,312     27,573     24,277 
                                 ---------  ---------  ---------  --------- 
    Total cost of revenue        $ 150,671  $ 123,662  $ 180,096  $ 123,746 
                                 =========  =========  =========  ========= 
Gross margin by Product and                                                 
 Service                                                                    
  Product Gross Margin         %      16.2%      24.0%      18.5%      23.0%
  Service Gross Margin         %      39.7%      39.1%      39.3%      41.3%
                                 ---------  ---------  ---------  --------- 
    Total gross margin         %      21.9%      27.8%      22.6%      27.4%
                                 =========  =========  =========  ========= 
                                                                            
    Total operating expenses     $  49,203  $  50,444  $  51,006  $  52,053 
                                 =========  =========  =========  ========= 
                                                                            
Net (loss) income              ) $  (8,680) $   1,101  $   9,224  $  (4,465)
                                 =========  =========  =========  ========= 
                                                                            
Earnings per share                                                          
  Basic net (loss) income per                                               
   share                       ) $   (0.27) $    0.03  $    0.28  $   (0.13)
  Diluted net (loss) income per                                             
   shar
e                       ) $   (0.27) $    0.03  $    0.27  $   (0.13)
                                 =========  =========  =========  ========= 
Shares used in computing net                                                
 (loss) income per share                                                    
  Basic                             32,166     32,410     33,201     33,859 
  Diluted                           32,166     32,778     34,467     33,859 
                                 ---------  ---------  ---------  --------- 
                                                                            
                                                                            
            SILICON GRAPHICS INTERNATIONAL CORP. AND SUBSIDIARIES           
                           TRENDED FINANCIAL DATA                           
                               (In thousands)                               
                                 (Unaudited)                                

 
                                                                           
                                 Q1 FY12    Q2 FY12    Q3 FY12    Q4 FY12  
                                ---------  ---------  ---------  --------- 
                                                                           
Total Revenue                                                              
  Americas                      $ 112,392  $ 109,721  $ 128,321  $ 123,311 
  APJ                              40,106     56,873     44,660     28,753 
  EMEA                             26,397     28,620     26,409     27,424 
                                ---------  ---------  ---------  --------- 
    Total revenue               $ 178,895  $ 195,214  $ 199,390  $ 179,488 
                                =========  =========  =========  ========= 
Product Revenue                                                            
  Americas                      $  89,056  $  88,429  $ 107,580  $ 102,100 
  APJ                              21,801     34,090     25,253     13,350 
  EMEA                             18,095     20,524     17,406     19,049 
                                ---------  ---------  ---------  --------- 
    Total product revenue       $ 128,952  $ 143,043  $ 150,239  $ 134,499 
                                =========  =========  =========  ========= 
Service Revenue                                                            
  Americas                      $  23,336  $  21,292  $  20,741  $  21,212 
  APJ                              18,305     22,783     19,407     15,403 
  EMEA                              8,302      8,096      9,003      8,374 
                                ---------  ---------  ---------  --------- 
    Total service revenue       $  49,943  $  52,171  $  49,151  $  44,989 
                                =========  =========  =========  ========= 
Operating profit (loss) - GAAP                                             
  Americas                      $    (133) $   1,868  $  (2,083) $ (10,346)
  APJ                                  78      1,883      1,749       (332)
  EMEA                             (2,313)    (5,699)    (1,157)    (4,958)
                                ---------  ---------  ---------  --------- 
    Total operating (loss)                                                 
     profit                     $  (2,368) $  (1,948) $  (1,491) $ (15,636)
                                ---------  ---------  ---------  --------- 
                                                                           
 
                                                                            
                                  Q1 FY13    Q2 FY13    Q3 FY13    Q4 FY13  
                                 ---------  ---------  ---------  --------- 
                                                                            
Total Revenue                                                               
  Americas                       $ 123,385  $ 112,358  $ 142,215  $ 118,550 
  APJ                               44,434     27,735     36,314     28,084 
  EMEA                              25,062     31,133     54,059     23,898 
                                 ---------  ---------  ---------  --------- 
    Total revenue                $ 192,881  $ 171,226  $ 232,588  $ 170,532 
                                 =========  =========  =========  ========= 
Product Revenue                                                             
  Americas                       $ 101,642  $  91,698  $ 119,341  $  97,764 
  APJ                               26,821     12,605     19,854     15,046 
  EMEA                              17,852     23,737     47,945     16,384 
                                 ---------  ---------  ---------  --------- 
    Total product revenue        $ 146,315  $ 128,040  $ 187,140  $ 129,194 
                                 =========  =========  =========  ========= 
Service Revenue                                                             
  Americas                       $  21,743  $  20,660  $  22,874  $  20,786 
  APJ                               17,613     15,130     16,460     13,038 
  EMEA                               7,210      7,396      6,114      7,514 
                                 ---------  ---------  ---------  --------- 
    Total service revenue        $  46,566  $  43,186  $  45,448  $  41,338 
                                 =========  =========  =========  ========= 
Operating profit (loss) - GAAP                                              
  Americas                       $   1,576  $   3,055  $   8,374  $     660 
  APJ                               (1,411)    (1,265)     3,018       (816)
  EMEA                              (7,158)    (4,670)    (9,906)    (5,111)
                                 ---------  ---------  ---------  --------- 
    Total operating (loss)                                                  
     profit                      $  (6,993) $  (2,880) $   1,486  $  (5,267)
                                 ---------  ---------  ---------  --------- 

  
Contact Information:  
SGI Investor Relations
John Swenson
+1-510-933-8370
jswenson@sgi.com 
Ben Liao
+1-510-933-8430
bliao@sgi.com 
 
 
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