MOUNTAIN VIEW, Calif. (May 8, 2006)—Silicon Graphics (OTC: SGID) today announced updated preliminary results for its third fiscal quarter which ended March 31, 2006. The financial information included in this release is preliminary in that it does not reflect any potential adjustments that may be required to our interim condensed consolidated financial statements as of and for the three and nine months ended March 31, 2006, following the completion of an asset impairment evaluation that must be performed in order for those financial statements to be stated in accordance with U.S. generally accepted accounting principles.

Revenue for the three months ended March 31, 2006 was $108 million, in line with the preliminary results announced April 25, 2006. For comparison, revenue was $144 million in the prior quarter and $159 million in the same quarter one year ago.

On a GAAP basis, net loss for the three months ended March 31, 2006 was $43 million or $0.16 per share, compared to a net loss of $45 million or $0.17 per share in the same quarter one year ago.

Gross margin for the third quarter fiscal year 2006 was 36%, compared to 42% in the prior quarter and 35% in the same quarter one year ago.

Operating expenses for the third fiscal quarter were $82 million compared with $89 million in the prior quarter and $100 million one year ago.

Unrestricted cash, cash equivalents and marketable investments on March 31, 2006 were $55 million compared with $66 million on December 30, 2005 and $84 million on March 25, 2005. SGI has received a limited forbearance under its asset-based credit agreement in light of not meeting the EBITDA covenant in that agreement. In conjunction with the forbearance, SGI has paid down the amount drawn under the term loan by $20 million using $10 million from unrestricted cash and $10 million of previously restricted cash.

SGI's Annual Meeting of Shareholders and its regularly scheduled quarterly conference call have been suspended until further notice.

Forward-Looking Statements
This news release contains forward-looking statements relating to future events or expected financial performance that involve risks and uncertainties. Factors that might cause such a difference include, but are not limited to: the effects of our chapter 11 filing; our ability to maintain adequate liquidity; and our ability to obtain and maintain normal terms with customers, suppliers and service providers. These and other risks are or will be detailed from time to time in SGI's periodic reports that are filed with the Securities and Exchange Commission, including the Form 8K's filed today in conjunction with this announcement (and other announcements) and SGI's quarterly report on Form 10-Q for the quarter ended December 30, 2005. Silicon Graphics is under no obligation to publicly update or revise any forward-looking statements, whether changes occur as a result of new information, future events or otherwise.

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SGI, also known as Silicon Graphics, Inc. (OTC: SGID), is a leader in high-performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at www.sgi.com.

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