SGI Finalizes Terms of Global Supply Chain Partnership With Jabil Circuit

SGI Finalizes Terms of Global Supply Chain Partnership With Jabil Circuit 
FREMONT, CA -- (Marketwired) -- 11/20/13 --  SGI (NASDAQ: SGI), the
trusted leader in high-performance computing and Big Data, today
announced that it has agreed to the principal terms under which Jabil
Circuit, Inc. (NYSE: JBL) will serve as SGI's primary manufacturing
services and supply chain management provider. 
The transition to Jabil will be implemented as a "manage in place"
model, which utilizes existing SGI facilities and personnel to foster
continuity of supply and best practices. Jabil will purchase SGI's
primary manufacturing facility, located at 100 N. Cashman Dr. in
Chippewa Falls, Wis., and certain other manufacturing assets for
approximately $6 million in cash. SGI expects that approximately 130
of its manufacturing personnel in Chippewa Falls will transfer to
Jabil. No other workforce transfers or reductions are contemplated as
a result of the transactions, which are expected to close in February
2014. As a result of the asset sale and transfer of personnel, SGI
expects to incur cash and non-cash charges of approximately $2
million in its second fiscal quarter ending Dec. 27, 2013.  
Jorge Titinger, president and CEO of SGI, said, "We expect
significant benefits to SGI and our customers as a result of this
relationship, including a more variable cost structure, greater
flexibility to respond to changes in volumes or customer
requirements, shorter cycle times for certain products, and enhanced
quality management. As a world-class supply chain partner, Jabil has
extensive experience in system-level assembly and testing of compute
and storage products and is able to meet the unique sourcing and
technical requirements of both our government and commercial
customers. We are excited about the opportunities for growth, cost
reduction, and enhanced customer satisfaction over time as we move
forward with this manufacturing partnership."  
James Luginbill, Jabil vice president, global business units, said,
"We look forward to working with SGI to meet their supply chain
needs. The capabilities of the SGI people joining the Jabil team will
be instrumental in meeting SGI's ongoing needs and the needs of other
potential high performance computing customers."  
About SGI
 SGI, the trusted leader in high performance computing
(HPC), 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.
Visit sgi.com for more information. 
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(youtube.com/sgicorp), Facebook (facebook.com/sgiglobal) and LinkedIn
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Cautionary Statement Regarding Forward Looking Statements 
 The
statements made in this press release regarding expected proceeds
from asset sales and the expected financial impact of asset
write-downs and other transition costs, as well as the anticipated
benefits of a contract manufacturing relationship between Jabil and
SGI, including a more variable cost structure, reduced costs, greater
flexibility with customer requirements, increased customer
satisfaction, shorter cycle times, enhanced quality management and
opportunities for growth, 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:  


 
--  Risks related to the transaction and the satisfaction of its closing
    conditions;
--  Fluctuations in the buying patterns and sizes of customer orders;
--  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 new and existing competitors, such as new product
    announcements or introductions or changes in pricing;
--  Market acceptance of newer products; and
--  Other risks as detailed in SGI's filings with the Securities and
    Exchange Commission ("SEC"), including those described under the
    caption "Risk Factors" in SGI's Annual Report on Form 10-K for the
    fiscal year ended June 28, 2013 and SGI's Quarterly Report on Form
    10-Q for the quarter ended September 27, 2013, both of 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 press
release, whether as a result of new information, future events or
otherwise, unless otherwise required by law.  
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. 
Contact Information:  
All Inquiries
John Swenson
+1-510-933-8370
jswenson@sgi.com 
 
 
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