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SGI Reports Preliminary Results For Fiscal Second Quarter, Announces Stock Repurchase Plan

FREMONT, Calif., Jan. 15, 2013 (GLOBE NEWSWIRE) -- In conjunction with its planned presentation today at the 15 th Annual Needham Growth Conference in New York, SGI (Nasdaq:SGI) today reported preliminary results for its fiscal second quarter ended Dec. 28, 2012. The company also announced that its board of directors has authorized a $15 million stock repurchase plan.

The following results are preliminary and are subject to change pending the expected full release of fiscal second quarter results on Jan. 30, 2013.

  • On a GAAP basis, the company expects to report net income for the second quarter in the range of breakeven to $1 million, or $0.00 to $0.03 per share, which compares with earlier guidance of a net loss of $(0.22) to $(0.14) per share.
  • On a non-GAAP basis, the company expects to report net income for the second quarter in the range of $3 to $4 million, or $0.07 to $0.10 per share, which compares with earlier guidance of breakeven to $0.08 per share. Non-GAAP net income is expected to exclude approximately $3 million of net adjustments to GAAP net income, comprised of approximately $7 million of stock-based compensation expense, amortization of intangibles, restructuring, and severance charges, partially offset by a non-cash $4 million tax-related benefit.
  • The company expects to report revenue for the second quarter in the range of $170 to $172 million, which compares with earlier guidance of $180 to $195 million.
  • Revenue for the fiscal second quarter was less than expected as certain shipments for U.S. government customers pushed into the fiscal third quarter, primarily due to uncertainty related to the "Fiscal Cliff" at year-end. However, gross margins and operating expenses were better than expected, leading to stronger bottom-line performance.
  • Over the fiscal third and fourth quarters, the company currently expects to achieve revenue in the range of $400-$420 million, including approximately $50 million related to the previously disclosed low-margin deals (LMD's).
  • Cash and cash equivalents as of Dec. 28, 2012 were approximately $128 million, up from $111 million in the prior quarter. The company paid off its working capital line of credit in the quarter, an $11 million use of cash. Including this pay off, net cash in the quarter improved by $28 million, reflecting continuing improvements in working capital management.

"We are pleased to have achieved non-GAAP profitability and another strong cash performance in the second quarter, which is a reflection of our continuing improvements in deal quality, costs, and working capital management," said Jorge Titinger, president and chief executive officer. "We are making good progress on our longer-term strategic vision to leverage SGI's strong technology in the areas of Big Data, Storage, and Scale-Up Computing. At the same time, we are mindful of the challenging near-term environment for IT spending among both government and commercial customers, particularly outside the U.S. We are therefore staying focused on previously discussed operational initiatives around cost reduction and supply chain management to help maintain our positive momentum."

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