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 gross profit and gross margin, non-GAAP operating expenses, 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; and (4) other non-recurring costs, including settlements and other items. These measures are adjusted as described in the reconciliation of GAAP and non-GAAP numbers at the end of 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 at the end of this press release. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in SGI's SEC filings.
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Silicon Graphics International Corp.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
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June 28, June 29, June 28, June 29,
2013 2012 2013 2012
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Revenue $ 170,532 $ 179,488 $ 767,227 $ 752,987
Cost of revenue 123,746 142,002 578,175 559,170
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Gross profit 46,786 37,486 189,052 193,817
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Operating expenses:
Research and development 15,594 14,929 60,611 62,356
Sales and marketing 19,671 21,692 78,730 88,414
General and administrative 12,821 14,161 54,317 62,021
Restructuring 3,967 2,340 9,048 2,469
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Total operating expenses 52,053 53,122 202,706 215,260
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Loss from operations (5,267) (15,636) (13,654) (21,443)
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Interest income (expense), net (33) (147) (311) (297)
Other income (expense), net (225) (1,490) (1,478) (1,720)
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Total other income (expense),
net (258) (1,637) (1,789) (2,017)
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Loss before income taxes (5,525) (17,273) (15,443) (23,460)
Income tax (benefit) provision (1,060) 1,113 (12,623) 1,001
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Net loss $ (4,465) $ (18,386) $ (2,820) $ (24,461)
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Basic and diluted net loss per
share $ (0.13) $ (0.58) $ (0.09) $ (0.77)
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Shares used in computing basic
and diluted net loss per share 33,859 31,947 32,909 31,653
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Share-based compensation by
category is as follows:
Cost of revenue $ 336 $ 323 $ 1,598 $ 1,358
Research and development 504 390 2,250 1,938
Sales and marketing 347 312 1,629 1,570
General and administrative 1,097 1,111 4,623 5,195
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Total $ 2,284 $ 2,136 $ 10,100 $ 10,061
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