SGI Reports Financial Results for the Second Quarter of Fiscal 2015 

SGI today reported financial results for its fiscal second quarter 2015 ended December 26, 2014.

Total revenue for the fiscal second quarter was $138 million, an increase of 24% from $112 million in the previous quarter and an increase of 19% from $116 million in the second fiscal quarter of 2014.

GAAP net loss for the fiscal second quarter was $10 million, or $(0.30) per share, compared with a GAAP net loss of $10 million, or $(0.30) per share, in the prior quarter, and a GAAP net loss of $14 million, or $(0.40) per share, in the second quarter of fiscal 2014. Non-GAAP net income for the quarter was $0.1 million, or breakeven per diluted share, compared with a non-GAAP net loss of $5 million, or $(0.14) per share, in the prior quarter and a non-GAAP net loss of $7 million, or $(0.20) per share, in the year-ago period.

• Core revenue, which excludes $1 million of revenue related to legacy cloud infrastructure business, was $137 million, an increase of 24% from $111 million in the prior quarter and 29% from $107 million in the same quarter a year ago.
• Revenue from the company's U.S. Federal business was $72 million, an increase of 19% from $61 million in the prior quarter and 63% from $44 million in the same quarter a year ago.
• Core revenue in the company's International and Commercial sectors was $65 million, an increase of 31% from $50 million in the prior quarter and 4% from $62 million in the same quarter a year ago.

"In the second quarter we made progress on our strategic priorities, including large project awards with existing and new customers. Our enterprise growth strategy began to deliver results as we further penetrated various technical computing markets and recognized our first revenue for our UV 300H product. This resulted in the highest bookings quarter we have seen in nearly three years, driven in part by the strength and diversification of our Federal business," said Jorge Titinger, President and CEO of SGI.

In a separate press release, the company today also announced the closing of a $70 million secured term loan facility. "This successful financing enables us to fund working capital for our bookings growth, especially the large Federal program award wins, which have longer award to acceptance cycle times," said Robert Nikl, EVP and Chief Financial Officer.

Recent Highlights 

• As part of the Department of Defense's ongoing initiative to improve high performance computing (HPC) resources, SGI was awarded two contracts this quarter totaling approximately $60 million for SGI ICE X supercomputers with SGI InfiniteStorage. The first contract is with the US Engineer Research and Development Center, and the second is with the Air Force Research Laboratory.
• SGI recognized revenue for two NASA contracts this quarter, enabling greater diversification into Federal agencies. The first was with the NASA Ames Research Center which is upgrading its flagship supercomputer, Pleiades. The second was with the NASA Center for Climate Simulation (NCCS), located at NASA's Goddard Space Flight Center, which is enhancing its research and analysis capabilities in climate prediction.
• The IT-4 National Supercomputing Center in the Czech Republic selected the SGI ICE XA solution to further its research. At two petaflops, the new supercomputer is expected to rank as one of the 50 largest supercomputers in the world.

Fiscal Third Quarter and Fiscal Year Outlook

The company is providing the following financial outlook:

• The company expects total revenue for its fiscal third quarter ending March 27, 2015 to be in the range of $120 million to $130 million.
• GAAP net loss for the fiscal third quarter is expected to be in the range of $5 to $9 million, or $(0.15) to $(0.25) per share. After excluding approximately $5 million of adjustments for stock-based compensation expense, restructuring and severance costs, intangibles amortization and other items, non-GAAP net loss for the quarter is expected to be in the range of breakeven to $4 million, or $0.00 to $(0.10) per share.
• The company expects total revenue for the second half of fiscal 2015 to be in the range of $290 to $310 million, which represents growth of 16% to 24% over the first half of fiscal 2015, and growth of 9% to 16% over the comparable period last year.
• The company expects total revenue for its fiscal year ending June 26, 2015 to be in the range of $540 million to $560 million, reflecting annual core revenue growth of approximately 8% to 12%.