Cray Inc. Reports Third Quarter Results.Business Editors SEATTLE--(BUSINESS WIRE)--Oct. 31, 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:CRAY) today reported results for the company's third quarter. Cray will hold an investor teleconference at 8:00 a.m. PST/11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy today to discuss the results and company progress (details are provided below). For the third quarter ended September September: see month. 30, 2000, Cray Inc. reported revenues of $33.7 million, compared to revenues of $850,000 for the third quarter of 1999. Exclusive of imputed interest Imputed Interest A term used to describe interest considered to be paid, even through no interest payment has been made. Notes: Imputed interest is calculated based upon actual payments that are to be paid, but have not yet been paid. and amortization of expenses related to the acquisition of the Cray business unit assets, the company reported a net loss of $3.9 million, or ($0.12) per share, compared to a net loss of $13.9 million, or ($0.59) per share in the year ago period. Including the $2.2 million in imputed interest and amortization expenses, the net loss for the third quarter of 2000 was $6.1 million, or ($0.18) per share. The company continues to invest heavily in R&D, with expenses of $13.3 million, or 39 percent of total revenue, for the third quarter. "As we stated in August, we expected a slower third quarter due to the schedule of product upgrade introductions and the likely timing of orders, and a stronger fourth quarter. We continue to expect resumed strength in the fourth quarter," 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. . The company also reported 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 of $2.0 million for the quarter. The company expects EBITDA to be solidly positive for the full year, as expected increases in sales drive sales drive n → promoción f de ventas sales drive n → campagne commerciale, animation f des ventes EBITDA substantially higher in the fourth quarter. For the nine-month period ending September 30, 2000, the company reported revenues of $84.7 million, compared to revenues of $1.5 million for the prior-year period. Exclusive of imputed interest and amortization expenses, the company reported a net loss of $6.9 million, or ($0.22) per share, compared to a net loss of $27.4 million, or ($1.31) per share in the year-ago period. Including imputed interest and amortization expenses, the company reported a net loss of $11.4 million, or ($0.36) per share for the nine months ended September 30, 2000. "The third quarter was focused on building for the future, both on the product side and the applications side," continued Rottsolk. "We plan to announce significantly enhanced versions of the successful Cray SV1(TM) product line very soon, and to begin shipping the new versions in the second quarter of 2001. We expect strong contributions from the 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. (TM) line in the fourth quarter and through next year. Visibility on the order pipeline is better now than three months ago. The full CMOS-based Cray 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. (TM) system is slated to begin shipping in the mid-to-late 2001 timeframe. The Cray SV2(TM), our largest development program, continues to proceed on schedule and is starting to attract real interest from outside as well as inside of our customer base." "On the applications side, we announced pioneering collaborations with two of the world's leading manufacturing software The following list of software modules are the manufacturing components of Baan's ERP (BaanERP) system, acquired by SSA Global in 2003 and subsequently by Infor at the end of 2006. It is listed here because it provides a comprehensive overview of the required software. See MES. companies. Cray Inc. and MSC (1) (MSC.Software Corporation, Santa Ana, CA, www.mscsoftware.com) Founded in 1963 by Richard H. MacNeal and Robert G. Schwendler, MSC is the world's largest provider of mechanical computer aided engineering (MCAE) strategies, simulation software and services. .Software achieved a revolutionary 900 percent performance increase that will make it possible to improve time to market, automobile ride and handling characteristics for automotive companies worldwide. With MCube, a French firm, we are attacking the complex and economically significant problem of alleviating wind noise from side mirrors and other structures," Rottsolk said. "We are also actively investigating promising opportunities in the genomics and bioinformatics Using computers in biological research to analyze or predict the composition of molecules (nucleic acids, proteins, etc.) and model biologic systems. Bioinformatics is most prominent in the Human Genome Project, which has recorded the three billion chemical base pairs that make up the fields." "As projected, during the third quarter we captured our first order from Japan," 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 Copeland, vice president of sales and marketing, "The Japan Advanced Institute of Science and Technology ordered a 128-processor Cray T3E system. We also had an important order from the Arctic Region Supercomputing Center The Arctic Region Supercomputing Center (ARSC) is a research facility organized under the University of Alaska Fairbanks. It is funded by the United States Department of Defense, and is a member of the department's High Performance Computing Modernization Program (HPCMP). that calls for delivery of a 32-processor enhanced Cray SV1 system, and includes an option for a next-generation Cray SV2 system. The U.S. Navy order we announced in the second quarter includes an upgrade to a Supercluster su·per·clus·ter n. A group of neighboring clusters of galaxies. supercluster A large group of neighboring clusters of galaxies, along with isolated galaxies scattered between them, the entire collection (TM) of four coupled Cray SV1ex systems. We still expect to capture our second customer for an all-CMOS MTA system later this year," Copeland said. Copeland said Cray Inc. held additional meetings of its new Customer Advisory Board, including the first in Japan, and in October hosted the first Cray User Group (CUG CUG Closed User Group CUG Computer Users Group CUG Citizen's Union of Georgia CUG Cray Users Group CUG China University of Geoscience CUG Census User Guide CUG Covai User Group (India) CUG Cisco Users Group CUG Closed Users Group ) conference since the combined Cray Inc. was formed in April 2000. "These meetings were extremely useful," he said. "With each passing month, we are seeing a greater comfort level and sense of excitement about Cray Inc. Customers are surprised that we've come so far, so quickly," he added. "We expect to have a heightened presence at the annual SC2000 high-performance computing High-speed computing, which typically refers to supercomputers used in scientific research. conference in early November." Conference Call Management will discuss both the results and company progress and hold a question and answer session for callers today, October 31, 2000, at 8:00 a.m. Pacific / 11:00 a.m. Eastern. To participate, call 415/247-8517 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 October 31 for 48 hours. To access, please dial 800/633-8284, or 858/812-6440 (international), reservation number 16706533. 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.streetevents.com. About Cray Inc. Cray Inc. designs, builds and sells high-performance MPP (Massively Parallel Processing or Massively Parallel Processor) A multiprocessing architecture that uses up to thousands of processors. Some might contend that a computer system with 64 or more CPUs is a massively parallel processor. , 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(TM) and Cray SV(TM) product lines together represent the future of supercomputing. Go to www.cray.com for more information on the company. Cray is a registered trademark, and Cray T3E, Cray SV1, Cray MTA and Cray SV2 are trademarks, of Cray Inc. All other trademarks are the property of their respective owners. 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 Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
December 31, September 30,
1999 2000
---------- ----------
(unaudited)
ASSETS
Cash and cash equivalents $ 11,201 $ 3,253
Accounts receivable 641 22,513
Inventory, net 4,513 19,371
Spares inventory, net -- 24,040
Property and equipment, net 5,829 27,506
Intangible assets, net 186 31,777
Other assets 1,040 3,845
---------- ----------
TOTAL $ 23,410 $ 132,305
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 7,691 $ 68,241
Non-current liabilities 1,412 19,070
Shareholders' equity 14,307 44,994
---------- ----------
TOTAL $ 23,410 $ 132,305
========== ==========
Cray Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 2000 1999 2000
--------- --------- --------- ---------
REVENUE:
Product $ 814 $ 10,404 $ 1,371 $ 37,097
Service 36 23,284 80 47,608
--------- --------- --------- ---------
Total revenue 850 33,688 1,451 84,705
--------- --------- --------- ---------
OPERATING EXPENSES:
Cost of product
revenue 956 7,017 1,506 24,259
Cost of service
revenue 16 11,409 67 23,699
Research and
development 6,378 13,272 16,978 31,620
Inventory
obsolescense
charge 6,441 6,441
Marketing and sales 611 4,397 1,789 7,987
General and
administrative 551 1,645 1,654 4,643
--------- --------- --------- --------
Total operating
expenses 14,953 37,740 28,435 92,208
--------- --------- --------- --------
Loss from operations (14,103) (4,052) (26,984) (7,503)
Other Income
(Expense) 169 114 (433) 616
Imputed Interest
Expense (484) (1,203)
Amortization of
Intangible
Assets (1,675) (3,350)
--------- --------- --------- ---------
Net loss (13,934) (6,097) (27,417) (11,440)
Preferred stock
dividend (116)
--------- --------- --------- ---------
Loss per common
share $ (13,934) $ (6,097) $(27,533) $ (11,440)
========= ========= ========= =========
Loss per common share,
Basic and diluted $ (0.59) $ (0.18) $ (1.31) $ (0.36)
========= ======== ========= =========
Weighted average
shares outstanding,
Basic and diluted 23,769 33,401 21,064 31,500
========= ======== ========= =========
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