Silicon Graphics Reports Second Quarter Fiscal Year 2009 Results

SUNNYVALE, Calif. (February 5, 2009) — Silicon Graphics, Inc. (NASDAQ: SGIC) today announced financial results for its second fiscal quarter ended December 26, 2008.

Revenue for the second quarter was $82.8 million, compared to $92.8 million in the previous quarter and $90.1 million in the second quarter of the prior year. The company's net loss for the quarter was $49.2 million, or $4.24 per share, versus a net loss of $33.7 million or $2.91 per share last quarter and $42.2 million or $3.78 per share in the second quarter of the prior year.

Excluding charges for restructuring and impairment of investments, earnings before interest, taxes, depreciation, and amortization (EBITDA) for the second quarter was a loss of $17.3 million, compared to a loss of $13.2 million for the previous quarter and a loss of $22.1 million in the second quarter of the prior year.

Pro forma revenue, a non-GAAP measure, for the second quarter was $89.3 million, compared to $117.5 million in the previous quarter and $109.1 million in the second quarter of the prior year. Pro forma revenue excludes the effect of Statement of Accounting Position 97-2, which requires the deferral of revenue in certain circumstances under software revenue recognition rules and is useful when considered in connection with revenue as calculated under GAAP.

Bookings for the second quarter were $68 million, compared to $58 million in the first quarter and $100 million in the second quarter of the prior year. Bookings are calculated as the sum of all committed purchase orders for products and professional services deliverable within 12 months.

The company achieved key milestones and furthered its product and operational strategy during the quarter:

• NASA Ames Research Center in Mountain View, California launched the world's third fastest supercomputer, a SGI Altix ICE 8200EX system featuring 51,200-core Intel processors. This system was placed into operation much more quickly than other comparable systems.
• Bookings increased about 17 percent compared to the first quarter and were strongest in the company's government business, particularly defense applications.
• The company unveiled Silicon Graphics® VUE, a suite of software solutions that combine visual information from any source application or platform, fuse it into an intuitive 3D viewing experience, and securely deliver that experience anywhere in the world using any device.
• Silicon Graphics won multiple awards at the major industry conference Supercomputing 2008, and at GEOINT, the company held the first public demonstrations of its new visualization software family.

"With our strong foundation of government customers and our long-term strategy, our leading products and services continue to gain traction in a difficult economic situation," said Silicon Graphics CEO Robert "Bo" Ewald. "We'll remain focused on our core strengths and strategy of helping customers solve large data, compute and visually intensive problems, while we work inside the company to improve our operations and financial footing."

"Given the economic environment, we are very focused on managing our expenses and working capital. We continue to implement the cost reduction measures we announced in December," said Silicon Graphics CFO Greg Wood. "The benefit of these measures should begin to be seen in the second half of our fiscal year as we take aggressive action to return to profitability."

"As we move into 2009, we have received very positive feedback from customers about our current and upcoming products, which include the recently announced VUE visualization tools and our ISLE software family," added Ewald. "Meanwhile, governments around the world are beginning to take actions that should increase investments in IT spending in core government R&D programs. Many of our existing customers should see additional budgets and we are hopeful that we can serve their increasing needs."

Conference Call
SGI will conduct a conference call today at 2:00 p.m. Pacific Standard Time (PST) to provide additional details. The Webcast is available at http://www.sgi.com/. The conference call can be accessed by dialing (866) 616-5665 or (816) 650-0772 for participants outside of North America, conference ID: 81349573. An audio replay of this call will be available after 5:00 p.m. PST today at (800) 642-1687 or (706) 645-9291 for individuals outside of North America, conference ID: 81349573 and will be available until February 12, 2009. After February 12, 2009, the call will be available as an archived Webcast. All links to the archived Webcast and audio replay will be available through the SGI Web site at http://www.sgi.com/.

Silicon Graphics, Inc.
Silicon Graphics, Inc. (SGI) (NASDAQ: SGIC), is a leader in high-performance computing. SGI delivers a complete range of high-performance server and storage solutions along with industry-leading professional services and support that enable its customers to overcome the challenges of complex data-intensive workflows and accelerate breakthrough discoveries, innovation and information transformation. SGI solutions help customers solve their computing challenges whether it's enhancing the quality of life through drug research, designing and manufacturing safer and more efficient cars and airplanes, studying global climate, providing technologies for homeland security and defense, or helping enterprises manage large data. With offices worldwide, the company is headquartered in Sunnyvale, California, and can be found on the Web at www.sgi.com.

Note: The main number for SGI corporate headquarters is 408-524-1980.

© 2009 SGI. All rights reserved. SGI, the SGI cube, Silicon Graphics VUE and the SGI logo are registered trademarks of SGI in the United States and/or other countries worldwide. All other trademarks mentioned herein are the property of their respective owners.

This press release contains forward-looking statements, including statements relating to expense controls, cash management and new products that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth herein, including the risks and uncertainties discussed under the caption "Risk Factors" and elsewhere in SGI's Form 10-K or Form 10-Q most recently filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. SGI disclaims any intent or obligation to update these forward-looking statements.