Cray Inc. Reports Second Quarter Results; Company Achieves Profitability in Initial Combined Quarter, Company Reports Strong EBITDA of $9.8 Million.Business Editors & High Tech Writers SEATTLE--(BUSINESS WIRE)--Aug. 9, 2000 Global supercomputer supercomputer, a state-of-the-art, extremely powerful computer capable of manipulating massive amounts of data in a relatively short time. Supercomputers are very expensive and are employed for specialized scientific and engineering applications that must handle very leader Cray (Cray, Inc., Seattle, WA, www.cray.com) A supercomputer manufacturer founded in 1972 as Cray Research, Inc., by Seymour Cray, a leading designer of large-scale computers at Control Data. In 1976, it shipped its first computer to Los Alamos National Laboratory. Inc. (Nasdaq NM: CRAY) today reported results for the company's second quarter. These are the first combined results reflecting the April 1, 2000 acquisition of the Cray Research See Cray. business assets from Silicon Graphics Inc., (NYSE NYSE See: New York Stock Exchange : SGI (SGI, Sunnyvale, CA, www.sgi.com) A manufacturer of workstations and servers, founded in 1982 by Jim Clark. The company was founded as Silicon Graphics, Inc., but changed to its acronym in 1999. ). Cray will hold an investor teleconference at 8:00 a.m. PDT/11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today to discuss the results and company progress (details are provided below). For the second quarter ended June June: see month. 30, 2000, Cray Inc. reported revenues of $51 million, compared to revenues of $22,000 for the second quarter of 1999. Exclusive of amortization of acquisition expenses, the company reported a net profit of $5.1 million, or $0.15 per share, compared to a net loss of $6.7 million, or ($0.40) per share in the year ago period. Including the $1.7 million in amortization expenses related to the acquisition of the Cray business unit assets, net income for the second quarter of 2000 was $3.3 million, or $0.10 per share. The company's EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become was strong at $9.8 million for the quarter. "We expect EBITDA to be solidly positive for the full year," stated Jim Rottsolk, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . For the six-month period ending June 30, 2000, the company reported revenues of $51 million, compared to revenues of $601,000 for the prior year. Exclusive of amortization of acquisition expenses, the company reported a net loss of $2.9 million, or ($0.09) per share, compared to a net loss of $13.5 million, or ($0.87) per share in the year ago period. Including amortization expenses, the company reported a net loss of $4.7 million, or ($0.15) per share for the six months ended June 30, 2000. "Our initial quarter as the new Cray Inc. was extremely productive," continued Rottsolk. "We began this quarter by focusing on exploiting synergies between the two entities, then met with customers around the world--that process is now nearly complete. We also attracted some former Cray Research senior engineers and sales people back to the company." The company announced significant orders from the U.S. Army and U.S. Navy during the second quarter, and after the close of the quarter announced orders from industrial leaders Ford Motor Company (NYSE: F) and Phillips Petroleum Company Phillips Petroleum Company was founded in 1917 by L.E. Phillips and Frank Phillips, of Bartlesville, Oklahoma. Their younger brother, Waite Phillips was the benefactor of Philmont Scout Ranch. Phillips Petroleum was headquartered in Bartlesville, Oklahoma. (NYSE: P). "We expect to announce our first major order in Japan soon, and our second customer for an all CMOS-based MTA (1) (Message Transfer Agent or Mail Transfer Agent) The store and forward part of a messaging system. See messaging system. (2) See M Technology Association. 1. (messaging) MTA - Message Transfer Agent. system later this year," according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Rene RENE Recycling Network Europe RENE Rocket Engine Nozzle Ejector Copeland Copeland may refer to: Places
Contraction of we have. we've have reinforced our U.S. sales force and have been building our international sales force. We expect greater contributions from outside the U.S. going forward," he added. Copeland said Cray Inc. held a heavily attended first meeting of its new Customer Advisory Board in late July, and is planning additional meetings of the customer group this year. "Many supercomputer customers feel disenfranchised by vendors who are too large and diversified diversified (di·verˑ·s to focus on their requirements. Cray Inc. is the only vendor fully dedicated to supercomputing." Rottsolk emphasized that Cray Inc. remains in a building mode, and quarterly variability is normal for supercomputer companies. "We are projecting a slower third quarter due to the schedule of product upgrade introductions and the likely timing of orders, to be followed by a strong fourth quarter. The second quarter benefited from a large Cray T3E-1200 order from the Army. We do not expect other large orders until the fourth quarter. Our service revenues continue to make up about half of our top line and provide stability to our revenue mix. On the technology side, we are in the process of enhancing each of our products." Rottsolk said the full CMOS-based Cray MTA system is scheduled to begin shipping in mid- mid- pref. Middle: midbrain. 2001, and enhancements to the Cray SV1 product are slated for the first half of next year. "We also successfully completed another stringent quarterly milestone review of Cray SV2 development by the U.S. government." He added that multiple development efforts have resulted in high investment in R&D. "We are encouraged by the organized efforts of supercomputer customers to establish more rigorous performance tests for use in procurements," Rottsolk said. "As the current `theoretical peak performance' and Linpack benchmarks evolve into tests that more closely approximate real-world computing computing - computer applications, Cray Inc.'s market opportunity will expand." "The customer community is increasingly excited about the newly formed Cray Inc., the only U.S. producer of high-bandwidth, low-latency supercomputers capable of tackling the most challenging, economically important problems of science and industry," Rottsolk concluded. Conference Call Management will discuss both the results and company progress and hold a question and answer session for callers today, August 9, 2000, at 8:00 a.m. Pacific / 11:00 a.m. Eastern. To participate, call 415-537-1915 a few minutes before 8:00 a.m. Pacific / 11:00 a.m. Eastern (no passcode required). If you are unable to participate, a replay will be available from 10:00 a.m. Pacific on August 9 until August 11 at 10:00 a.m. Pacific. To access, please dial 1-800-633-8284, reservation number 15862880. In addition, the replay will be available for 90 days via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.vcall.com. About Cray Inc. Cray Inc. designs, builds and sells high-performance vector processor A computer with built-in instructions that perform multiple calculations on vectors (one-dimensional arrays) simultaneously. It is used to solve the same or similar problems as an array processor; however, a vector processor passes a vector to a functional unit, whereas an array processor and general-purpose parallel computer systems. The company has leading edge technology, multiple product platforms, nearly 900 employees, a $2 billion installed base of over 600 computers worldwide, major manufacturing and service capabilities and extensive global customer relationships. Cray believes its Multithreaded multithreaded - multithreading Architecture and Cray T3E The Cray T3E was Cray Research's second-generation massively parallel supercomputer architecture, launched in 1995. Like the previous Cray T3D It was a fully distributed memory machine using a 3D torus topology interconnection network. and SV2 systems together represent the future of supercomputing. Go to www.cray.com for more information on the company. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . There are certain factors that could cause Cray's execution plans to differ materially from those anticipated by the statements above. Such factors include risks associated with new product development, expected delivery and acceptance times, and timely availability of commercially acceptable components from third party suppliers. For a discussion of such risks, and other risks that could affect Cray's future performance, please see "Risk Factors" in Cray Inc.'s most recent SEC Form 10-Q Form 10-Q See 10-Q. . Cray is a registered trademark, and Cray SV2, Cray T3E and Cray T3E-1200 are trademarks, of Cray Inc. All other trademarks are the property of their respective owners. - FINANCIAL TABLES TO FOLLOW -
CRAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, June 30,
1999 2000
----------- -----------
(unaudited)
ASSETS
Cash and cash equivalents $ 11,201 $ 8,693
Accounts receivable 641 32,523
Inventory, net 4,513 22,020
Spares inventory, net 26,299
Property and equipment, net 5,829 26,024
Intangible assets, net 34,494
Other assets 1,226 3,075
----------- -----------
TOTAL $ 23,410 $ 153,128
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 7,691 $ 74,510
Non-current liabilities 1,412 27,742
Shareholders' equity 14,307 50,876
----------- -----------
TOTAL $ 23,410 $ 153,128
=========== ===========
CRAY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 2000 1999 2000
-------- -------- -------- --------
REVENUE:
Product $ $ 26,693 $ 557 $ 26,693
Service 22 24,280 44 24,324
-------- -------- -------- --------
Total revenue 22 50,973 601 51,017
-------- -------- -------- --------
OPERATING EXPENSES:
Cost of product revenue 1,643 15,239 4,588 17,242
Cost of service revenue 21 12,264 51 12,290
Research and development 3,569 13,865 6,562 18,348
Marketing and sales 545 2,822 1,178 3,590
General and administrative 638 1,898 1,103 2,998
-------- -------- -------- --------
Total operating expenses 6,416 46,088 13,482 54,468
-------- -------- -------- --------
Income (loss) from
operations (6,394) 4,885 (12,881) (3,451)
OTHER INCOME (EXPENSE) (278) 171 (602) 502
AMORTIZATION OF ACQUISITION
EXPENSES (1,748) (1,748)
-------- -------- -------- --------
Net income (loss) (6,672) 3,308 (13,483) (4,697)
Preferred stock dividend (45) (115)
-------- -------- -------- --------
Earnings (loss) per
common share $ (6,717) $ 3,308 $(13,598) $ (4,697)
======== ========= ======== ========
Earnings (loss) per
common share:
Basic $ (0.40) $ 0.10 $ (0.87) $ (0.15)
======== ========= ======== ========
Diluted $ (0.40) $ 0.10 $ (0.87) $ (0.15)
======== ========= ======== ========
Weighted average shares
outstanding:
Basic 16,677 33,367 15,696 31,492
======== ========= ======== ========
Diluted 16,677 33,448 15,696 31,492
======== ========= ======== ========
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