Cray Reports 2015 Full Year and Fourth Quarter Financial Results 

SEATTLE, Wash., Feb. 12 -- Global supercomputer leader Cray Inc. (NASDAQ: CRAY) has announced financial results for the year and fourth quarter ended December 31, 2015.

For 2015, Cray reported total revenue of $724.7 million, which compares with $561.6 million for 2014. Net income for 2015 was $27.5 million, or $0.68 per diluted share, compared to $62.3 million, or $1.54 per diluted share for 2014. Net income results for 2014 benefited from a $52.6 million income tax benefit which was driven by a reduction of substantially all of the valuation allowance held against the Company's deferred tax assets. Non-GAAP net income, which adjusts for selected unusual and non-cash items, was $53.0 million, or $1.30 per diluted share for 2015, compared to $24.3 million, or $0.60 per diluted share for 2014.

Revenue for the fourth quarter of 2015 was $267.5 million, which compares with $261.9 million in the fourth quarter of 2014. Net income for the fourth quarter of 2015 was $20.3 million, or $0.50 per diluted share, this compares to net income of $74.6 million, or $1.84 per diluted share in the fourth quarter of 2014. Net income results for the fourth quarter of 2014 benefited from a $33.8 million income tax benefit which was driven by a reduction of substantially all of the valuation allowance held against the Company's deferred tax assets. Non-GAAP net income was $32.2 million, or $0.79per diluted share for the fourth quarter of 2015, compared to non-GAAP net income of $40.3 million, or $0.99 per diluted share for the same period of 2014.

Overall gross profit margin for 2015 was 31%, compared to 33% for 2014. Total non-GAAP gross profit margin for 2015 was 32%, compared to 34% for 2014.

Operating expenses for 2015 were $184.7 million, compared to $175.2 million for 2014. Non-GAAP operating expenses for 2015 were $173.3 million, compared to $163.7 million for 2014.

As of December 31, 2015, cash, investments and restricted cash totaled $285 million. Working capital increased $54 million to $415 million, compared to $362 million at the end of 2014.

"We had an outstanding year, highlighted by record revenue, strong profitability, and excellent growth on the commercial side of our business," said Peter Ungaro, president and CEO of Cray. "Our momentum of new awards has also continued, with the European Centre for Medium-Range Weather Forecasts' recent announcement to significantly upgrade and expand its Cray supercomputer and storage. We continue to make significant progress in our three focus areas of supercomputing, storage and analytics, with major refreshes in each planned for 2016. I'm excited about our growth path as we're well positioned to again drive revenue growth and higher profits in 2016."

Outlook

For 2016, while a wide range of results remains possible, the Company expects revenue to be in the $825 million range. Revenue is expected to be in the range of $100 million for the first quarter of 2016, with the remainder of the year heavily weighted to the fourth quarter. Non-GAAP gross margin for the year is expected to improve and to be one to two percentage points higher than for 2015. Non-GAAP operating expenses for the year are anticipated to be about $205 million. Based on this outlook, the Company expects to improve its GAAP and non-GAAP operating profit margin for 2016 as compared to 2015.

Cray's 2016 effective non-GAAP tax rate is expected to be about 10%.

Actual results for any future period are subject to large fluctuations given the nature of Cray's business.

Recent Highlights

• In January, Cray was awarded a new contract to provide a major upgrade and expansion to the Cray XC supercomputers and Cray Sonexion storage system at the European Centre for Medium-Range Weather Forecasts(ECMWF). Consisting of products and multiple years of service, the contract is valued at more than $36 million and systems are expected to be delivered in 2016.
• In November, Cray announced it was awarded a contract to provide a Cray XC40 supercomputer to the University of Warsaw in Poland. The six-cabinet Cray XC40 system is located in the University's OCEAN research data center, a leading research center for computational and data driven sciences and one of the premier centers for large-scale high performance computing simulations and big data analytics in Central and Eastern Europe.
• In November, Cray announced that it will deliver a high performance computing optimized Docker solution for the Cray XC line of supercomputers. Docker containers for Cray XC systems are designed to provide better application portability and bring ease-of-use to running highly-scalable applications on advanced supercomputers. The new feature will also be available for Cray CS400, Cray XE and Cray XK customers later in 2016.
• In November, Cray was awarded a contract to provide the Alfred Wegener Institute in Bremerhaven, Germany with a Cray CS400 supercomputer featuring the new Intel Omni-Path Architecture. The system will also feature next-generation Intel Xeon processors, which are the follow-on to the Intel Xeon "Haswell" processors. The contract is valued at more than $3 million and the system is expected to be delivered in 2016.
• In November, Cray announced plans to join the OpenHPC Project designed to create a unified community of key stakeholders across the HPC industry. Cray's participation in OpenHPC is focused on standardizing software stack components, leveraging open-source technologies, and simplifying the maintenance and operation of the software stack for end-users.

Conference Call Information

Cray will host a conference call Thursday, February 11, 2016 at 1:30 p.m. PST (4:30 p.m. EST) to discuss its fourth quarter and year ended December 31, 2015 financial results. To access the call, please dial into the conference at least 10 minutes prior to the beginning of the call at (855) 894-4205. International callers should dial (765) 889-6838 and use the conference ID #41522985. To listen to the audio webcast, go to the Investors section of the Cray website at www.cray.com/company/investors.

If you are unable to attend the live conference call, an audio webcast replay will be available in the Investors section of the Cray website for 180 days. A telephonic replay of the call will also be available by dialing (855) 859-2056, international callers dial (404) 537-3406, and entering the conference ID #41522985. The conference call replay will be available for 72 hours, beginning at 4:45 p.m. PDT on Thursday, February 11, 2016.

About Cray Inc.

Global supercomputing leader Cray Inc. (NASDAQ: CRAY) provides innovative systems and solutions enabling scientists and engineers in industry, academia and government to meet existing and future simulation and analytics challenges. Leveraging more than 40 years of experience in developing and servicing the world's most advanced supercomputers, Cray offers a comprehensive portfolio of supercomputers and big data storage and analytics solutions delivering unrivaled performance, efficiency and scalability. Cray's Adaptive Supercomputing vision is focused on delivering innovative next-generation products that integrate diverse processing technologies into a unified architecture, allowing customers to meet the market's continued demand for realized performance. Go to www.cray.com for more information.

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Source: Cray