SGI Reports Financial Results for First Quarter of Fiscal 2014

SGI Reports Financial Results for First Quarter of Fiscal 2014 
FREMONT, CA -- (Marketwired) -- 10/30/13 --  SGI (NASDAQ: SGI), the
trusted leader in high performance computing and Big Data, today
reported financial results for its first fiscal quarter ended Sept.
27, 2013. Total revenue for the first fiscal quarter was $148
million, which compares with $171 million in the previous quarter and
$193 million in the first fiscal quarter of 2013.  
GAAP net loss for the first quarter was $7 million, or $(0.20) per
share, which compares with a net loss of $4 million, or $(0.13) per
share, in the prior quarter, and a net loss of $9 million, or $(0.27)
per share, in the first quarter of fiscal 2013. Non-GAAP net income
for the quarter was $1 million, or $0.04 per diluted share, which
compares with non-GAAP net income of $6 million, or $0.17 per diluted
share, in the prior quarter and a non-GAAP net loss of $3 million, or
$(0.10) per share, in the year-ago period.  


 
--  Core revenue (total revenue excluding revenue attributable to legacy
    cloud infrastructure) for HPC, Big Data, storage and services was $132
    million, a 5% increase over core revenue of $125 million in the prior
    quarter. Core revenue in the first quarter of fiscal 2013 was $132
    million, excluding $15 million related to low-margin deals (LMDs).
--  Revenue related to the legacy cloud, which is generally commodity
    servers for provisioning cloud infrastructure, was $16 million, which
    compares with $46 million in the prior quarter and $45 million in the
    fiscal first quarter of 2013.
--  Adjusted EBITDA in the quarter was approximately $5 million, which
    compares with $8 million in the prior quarter and $0 million in the
    same quarter a year ago.

  
"Final results for the quarter were consistent with the preliminary
results announced earlier this month, and reflect sequential growth
in our core revenue focus areas," said Jorge Titinger, president and
CEO of SGI. "Our operational turnaround is on track and we are
hitting our targets for margin improvement and expense reductions.
Our strategic focus on core growth markets in HPC, Big Data, and
Storage is gaining traction, as evidenced by the sequential growth in
core revenue. However, due to the unc
ertain timing of some government
projects, and given that much of our growth will be driven by large
deals with long sales cycles and extended acceptance criteria, our
trajectory is likely to be non-linear. We continue to expect solid
revenue growth and profitability in the second half of the fiscal
year and remain committed to our long-term goal of higher-than-market
revenue growth and low-double-digit operating margins." 
Recent Highlights 


 
--  On Oct. 22, SGI launched a portfolio of new solutions to enable Big
    Data innovations including SGI InfiniteData(TM) Cluster, SGI
    Object-Based Storage Solutions and SGI LiveArc(TM) AE for SGI
    InfiniteStorage(TM) Gateway that accelerate time to value, deliver
    petabyte scale, and lower costs for Big Data.
--  On Oct. 1, SGI announced that it acquired the assets of FileTek to
    expand its leadership in storage solutions that allow customers to
    manage data assets efficiently, reduce administrative overhead, and
    lower the cost of high-volume storage. The acquisition expands SGI's
    ability to solve the growing challenge of Big Data that is
    overwhelming budgets, staff, and the protection of data assets in
    today's enterprise.
--  On Sept. 10, SGI announced support for new Intel(R) Xeon(R)
    processor E5-2600 v2 within SGI Rackable, SGI(R) ICE(TM) X and
    InfiniteStorage(TM) suite of solutions, enabling new science and
    discoveries for NASA, Irish Center for High-End Computing (ICHEC),
    T-Systems, and AWE.

  
Outlook 
The company provides technical computing and storage solutions to large
government, higher education, 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 booking, installation, and acceptance of large deals is
difficult to predict and can cause significant swings in quarterly
revenue. The company derives a significant portion of its revenue
from the U.S. government and from third parties and educational
institutions that receive funding from the U.S. government.
Government shutdowns and other disruptions in the funding or
acceptance of government-related programs can impact the booking,
installation and final acceptance of systems. Management provides
guidance on 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.  
Due to current budget uncertainty in the Federal government, the
company lacks near-term visibility into expected revenue timing for a
large portion of its pipeline and therefore is suspending financial
guidance pending further clarity on expected government spending. 
Webcast and Conference Call Information
 A live webcast of the
earnings conference call will be available on the Investor Relations
section of SGI's website at investors.sgi.com. The public can also
listen to the earnings conference call at 2:00 p.m. PT (5:00 p.m. ET)
by dialing (888) 463-5422 (toll-free) or (970) 315-0484
(international).  
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. 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: 78589823. 
About SGI
 SGI, the trusted leader in technical computing, is focused
on helping customers solve their most demanding business and
technology challenges by delivering technical computing, Big Data
analytics, cloud computing, and petascale storage solutions that
accelerate time to discovery, innovation, and profitability. 
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, including SGI's 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:  


 
--  Substantial 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,
    development or product delivery delays, and delays in obtaining
    necessary components from suppliers;
--  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; and
--  Market acceptance of newer products.

  
In addition, SGI's actual growth in revenue and profitability for the
fiscal year ending June 27, 2014 could differ materially from
expectations for a number of reasons, including, but not limited to,
changes driven by new accounting, regulations, interpretations or
guidance and 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. 9, 2013, which is 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 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; (4) excess and obsolete
inventory write-off; and (5) other non-recurring costs, including
settlements and other items. These measures are adjusted as described
in the reconciliation of GAAP and non-GAAP numbers included in 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 in this press release. 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. 
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       
                                             ------------------------------ 
                                              September 27,   September 28, 
                                                  2013            2012      
                                             --------------  -------------- 
                                                                            
Revenue                                      $      147,519  $      192,881 
Cost of revenue                                     109,271         150,671 
                                             --------------  -------------- 
                                                                            
Gross profit                                         38,248          42,210 
                                             --------------  -------------- 
                                                                            
Operating expenses:                                                         
  Research and development                           14,834          13,969 
  Sales and marketing                                17,596          19,571 
  General and administrative                         12,482          14,189 
  Restructuring                                         526           1,474 
                                             --------------  -------------- 
    Total operating expenses                         45,438          49,203 
                                             --------------  -------------- 
                                                                            
Loss from operations                                 (7,190)         (6,993)
                                             --------------  -------------- 
                                                                            
  Interest income (expense), net                         (7)           (
155)
  Other income (expense), net                           303          (1,107)
                                             --------------  -------------- 
    Total other income (expense), net                   296          (1,262)
                                             --------------  -------------- 
Loss before income taxes                             (6,894)         (8,255)
Income tax (benefit) provision                          (71)            425 
                                             --------------  -------------- 
Net loss                                     $       (6,823) $       (8,680)
                                             ==============  ============== 
                                                                            
Basic and diluted net loss per share         $        (0.20) $        (0.27)
                                             ==============  ============== 
                                                                            
Shares used in computing basic and diluted                                  
 net loss per share                                  34,096          32,166 
                                             ==============  ============== 
                                                                            
Share-based compensation by category is as                                  
 follows:                                                                   
Cost of revenue                              $          442  $          500 
Research and development                                507             539 
Sales and marketing                                     579             386 
General and administrative                            1,448           1,086 
                                             --------------  -------------- 
Total                                        $        2,976  $        2,511 
                                             ==============  ============== 
                                                                            
                                                                            
                                                                            
                    Silicon Graphics International Corp.                    
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS              
                               (In thousands)                               
                                                                            
                                                September 27,    June 28,   
                                                    2013           2013     
                                               -------------- --------------
                    ASSETS                                                  
Current assets:                                                             
  Cash and cash equivalents                    $      160,058 $      175,181
  Current portion of restricted cash                    2,581            531
  Accounts receivable, net                             82,455         59,842
  Inventories                                          55,971         61,770
  Current portion of deferred cost of revenue          15,110         21,204
  Prepaid expenses and other current assets            13,325         14,094
                                               -------------- --------------
    Total current assets                              329,500        332,622
Non-current portion of restricted cash                  2,072          2,853
Property and equipment, net                            28,760         26,170
Intangible assets, net                                  3,794          4,643
Non-current portion of deferred cost of                                     
 revenue                                                7,695          7,281
Other assets                                           34,886         34,284
                                               -------------- --------------
      Total assets                             $      406,707 $      407,853
                                               ============== ==============
                                                                            
     LIABILITIES AND STOCKHOLDERS' EQUITY                                   
Current liabilities:                                                        
  Accounts payable                             $       58,325 $       51,531
  Accrued compensation                                 21,603         28,504
  Current portion of deferred revenue                  88,755         86,357
  Other current liabilities                            36,124         35,364
                                               -------------- --------------
    Total current liabilities                         204,807        201,756
Non-current portion of deferred revenue                49,802         50,362
Long-term income taxes payable                         10,425         10,149
Retirement benefit obligations                         11,875         11,542
Other non-current liabilities                           3,507          3,790
                                               -------------- --------------
    Total liabilities                                 280,416        277,599
                                                                            
Stockholders' equity                                  126,291        130,254
                                               -------------- --------------
      Total liabilities and stockholders'                                   
       equity                                  $      406,707 $      407,853
                                               ============== ==============
                                                                            
                                                                            
                                                                            
                    Silicon Graphics International Corp.                    
       RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES        
                   (In thousands, except per share data)                    
                                (Unaudited)                                 
                                                                            
                                             Three Months Ended             
                                ------------------------------------------- 
                                             September 27, 2013             
                                  Net                                       
                                 (Loss)            Gross   Gross  Operating 
                                 Income    EPS     Profit Margin   Expenses 
                                -------  -------  ------- ------  --------- 
GAAP                            $(6,823) $ (0.20) $38,248     26% $  45,438 
                                                                            
  Share-based compensation  (1)                                             
   in cost of revenue               442     0.02      442      1%         - 
  Share-based compensation  (1)                                             
   in operating expenses          2,534     0.07        -      -     (2,534)
  Amortization of           (1)                                             
   intangibles in cost of                                                   
   revenue                          255     0.01      255      0%         - 
  Amortization of           (1)                                             
   intangibles in operating                                                 
   expenses                         580     0.02        -      -       (580)
  Restructuring and         (2)                                             
   severance in cost of                                                   
  
   revenue                           33        -       33      0%         - 
  Restructuring and         (2)                                             
   severance in operating                                                   
   expenses                         896     0.03        -      -       (896)
  Excess and obsolete       (2)                                             
   inventory write-off in                                                   
   cost of revenue                3,242     0.09    3,242      2%         - 
  Other non-recurring items (2)                                             
   in operating expenses            736     0.02        -      -       (736)
  Canada tax benefits       (2)    (611)   (0.02)       -      -          - 
                                -------  -------  ------- ------  --------- 
Non-GAAP                        $ 1,284  $  0.04  $42,220     29% $  40,692 
                                =======  =======  ======= ======  ========= 
                                                                            
Weighted average shares                                                     
 used in computing:                                                         
    Basic net loss per                                                      
     share                                34,096                            
    Dilutive net income per                                                 
     share                                35,475                            
                                                                            
                                                                            
                                             Three Months Ended             
                                ------------------------------------------- 
                                             September 28, 2012             
                                                                            
                                  Net              Gross   Gross  Operating 
                                  Loss     EPS     Profit Margin   Expenses 
                                -------  -------  ------- ------  --------- 
GAAP                            $(8,680) $ (0.27) $42,210     22% $  49,203 
                                                                            
  Share-based compensation  (1)                                             
   in cost of revenue               500     0.02      500      0%         - 
  Share-based compensation  (1)                                             
   in operating expenses          2,011     0.06        -      -     (2,011)
  Amortization of           (1)                                             
   intangibles in cost of                                                   
   revenue                          268     0.01      268      0%         - 
  Amortization of           (1)                                             
   intangibles in operating                                                 
   expenses                         704     0.02        -      -       (704)
  Restructuring and         (2)                                             
   severance in cost of                                                     
   revenue                          228     0.01      228      0%         - 
  Restructuring and         (2)                                             
   severance in operating                                                   
   expenses                       1,656     0.05        -      -     (1,656)
                                -------  -------  ------- ------  --------- 
Non-GAAP                        $(3,313) $ (0.10) $43,206     22% $  44,832 
                                =======  =======  ======= ======  ========= 
                                                                            
Weighted average shares                                                     
 used in computing:                                                         
    Basic and diluted net                                                   
     loss per share                       32,166                            
                                                                            
                                                                            
                                             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  (1)                                             
   in cost of revenue               336     0.01      336      0%         - 
  Share-based compensation  (1)                                             
   in operating expenses          1,948     0.06        -      -     (1,948)
  Amortization of           (1)                                             
   intangibles in cost of                                                   
   revenue                          255     0.01      255      0%         - 
  Amortization of           (1)                                             
   intangibles in operating                                                 
   expenses                         615     0.02        -      -       (615)
  Restructuring and         (2)                                             
   severance in cost of                                                     
   revenue                          872     0.02      872      1%         - 
  Restructuring and         (2)                                             
   severance in operating                                                   
   expenses                       5,936     0.17        -      -     (5,936)
  Other non-recurring items (2)                                             
   in cost of revenue               161        -      161      0%         - 
  Other non-recurring items (2)                                             
   in operating expenses            220     0.01        -      -       (220)
                                -------  -------  ------- ------  --------- 
Non-GAAP                        $ 5,878  $  0.17  $48,410     28% $  43,334 
                                =======  =======  ======= ======  ========= 
                                                                            
Weighted average shares                                                     
 used in computing:                                                         
    Basic net loss per                                                      
     share                                33,859                            
    Dilutive net income per                                                 
     share                                35,000                            
                                                                            
                                                                            
----------------------------------------------------------------------------
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       
                                                                            
    (c) Excess and obsolete charges related to our strategic withdrawal from
    legacy cloud infrastructure                                             
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
                    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  
                                                                  Ended     
                                                             -------------- 
                                                              September 27, 
                                                                  2013      
                                                                            
GAAP - Loss before income taxes                              $       (6,894)
                                                                            
  Adjustments of GAAP to Non-GAAP earnings before income                    
   taxes (*)                                                          8,718 
                                                             -------------- 
Non - GAAP Income before income taxes                                 1,824 
                                                             -------------- 
  Depreciation                                                        2,741 
  Interest income                                                       (57)
  Interest expense                                                       64 
                                                             -------------- 
Non-GAAP EBITDA                                              $        4,572 
                                                             ============== 
                                                                            
                                                                            
                                                                            
                                                              Three Months  
                                                                  Ended     
                                                             -------------- 
                                                              September 28, 
                                                                  2012      
                                                                            
GAAP - Loss before income taxes                              $       (8,255)
                                                                            
  Adjustments of GAAP to Non-GAAP earnings before income                    
   taxes (*)                                                          5,367 
                                                             -------------- 
Non - GAAP Loss before income taxes                                  (2,888)
                                                             -------------- 
  Depreciation                                                        2,527 
  Interest income                                                       (44)
  Interest expense                                                      199 
                                                             -------------- 
Non-GAAP EBITDA                                              $         (206)
                                                             ============== 
                                                                            
                                                                            
                                                              Three Months  
                                                                  Ended     
                                                             -------------- 
                                                              June 28, 2013 
                                                                            
GAAP - Loss before income taxes                              $       (5,525)
                                                                            
  Adjustments of GAAP to Non-GAAP earnings before income                    
   taxes (*)                                                         10,343 
                                                             -------------- 
Non - GAAP Income before income taxes                                 4,818 
                                                             -------------- 
  Depreciation                                                        2,719 
  Interest income                                                       (45)
  Interest expense                                                       78 
                                                             -------------- 
Non-GAAP EBITDA                                              $        7,570 
                                                             ============== 
                                                                            
(*) 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 FY13    Q2 FY13    Q3 FY13    Q4 FY13    Q1 FY14  
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Revenue                                                                     
  Product Revenue     $ 146,315  $ 128,040  $ 187,140  $ 129,194  $ 108,820 
  Service Revenue        46,566     43,186     45,448     41,338     38,699 
                      ---------  ---------  ---------  ---------  --------- 
    Total revenue     $ 192,881  $ 171,226  $ 232,588  $ 170,532  $ 147,519 
                      =========  =========  =========  =========  ========= 
Cost of revenue                                                             
  Product             $ 122,597  $  97,350  $ 152,523  $  99,469  $  88,692 
  Service                28,074     26,312     27,573     24,277     20,579 
                      ---------  ---------  ---------  ---------  --------- 
    Total cost of                                                           
     revenue          $ 150,671  $ 123,662  $ 180,096  $ 123,746  $ 109,271 
                      =========  =========  =========  =========  ========= 
Gross margin by                                                             
 Product and Service                                                        
  Product 
Gross                                                             
   Margin                  16.2%      24.0%      18.5%      23.0%      18.5%
  Service Gross                                                             
   Margin                  39.7%      39.1%      39.3%      41.3%      46.8%
                      ---------  ---------  ---------  ---------  --------- 
    Total gross                                                             
     margin                21.9%      27.8%      22.6%      27.4%      25.9%
                      =========  =========  =========  =========  ========= 
                                                                            
    Total operating                                                         
     expenses         $  49,203  $  50,444  $  51,006  $  52,053  $  45,438 
                      =========  =========  =========  =========  ========= 
                                                                            
Net (loss) income     $  (8,680) $   1,101  $   9,224  $  (4,465) $  (6,823)
                      =========  =========  =========  =========  ========= 
                                                                            
Earnings per share                                                          
  Basic net (loss)                                                          
   income per share   $   (0.27) $    0.03  $    0.28  $   (0.13) $   (0.20)
  Diluted net (loss)                                                        
   income per share   $   (0.27) $    0.03  $    0.27  $   (0.13) $   (0.20)
                      =========  =========  =========  =========  ========= 
Shares used in                                                              
 computing net (loss)                                                       
 income per share                                                           
  Basic                  32,166     32,410     33,201     33,859     34,096 
  Diluted                32,166     32,778     34,467     33,859     34,096 
                      =========  =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
            SILICON GRAPHICS INTERNATIONAL CORP. AND SUBSIDIARIES           
                               TRENDED REVENUE                              
                               (In thousands)                               
                                 (Unaudited)                                
                                                                            
                            Q1 FY13   Q2 FY13   Q3 FY13   Q4 FY13   Q1 FY14 
                           --------- --------- --------- --------- ---------
                                                                            
Total Revenue                                                               
  Compute                  $ 130,800 $ 109,129 $ 160,367 $  97,870 $  88,842
  Storage                     15,515    18,911    26,773    31,324    19,978
  Service                     46,566    43,186    45,448    41,338    38,699
                           --------- --------- --------- --------- ---------
    Total revenue          $ 192,881 $ 171,226 $ 232,588 $ 170,532 $ 147,519
                           ========= ========= ========= ========= =========
                                                                            
Total Revenue                                                               
  Americas                 $ 123,385 $ 112,358 $ 142,215 $ 118,550 $ 102,212
  APJ                         44,434    27,735    36,314    28,084    24,266
  EMEA                        25,062    31,133    54,059    23,898    21,041
                           --------- --------- --------- --------- ---------
    Total revenue          $ 192,881 $ 171,226 $ 232,588 $ 170,532 $ 147,519
                           ========= ========= ========= ========= =========

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