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SGI Releases Preliminary Fourth Quarter Results.

Management Changes Announced

MOUNTAIN VIEW, Calif., July 9 /PRNewswire/ --

SGI (NYSE: SGI), today announced estimated results for its fiscal fourth quarter which ended June 30, 2001. Based on a preliminary review, the Company expects revenue to be between $430 and $440 million, which is in line with Goldman Sachs' estimate. SGI expects to report an operating loss, before restructuring and other charges, in the range of $70 and $80 million.

"As with other companies, we continue to find the current economic situation to be very challenging," said Bob Bishop, Chairman and CEO. "While our revenues were within expectations, booking levels appear to be disappointing. In light of these preliminary results, we are reviewing our plans for FY2002 with respect to bookings, revenue, expense levels and cash requirements." SGI plans to announce its fourth quarter and fiscal year 2001 results along with guidance for 2002 on Thursday, July 26, 2001.

SGI had unrestricted cash of approximately $120 million at quarter end, compared to $118 million at the end of the previous quarter.

SGI also announced today that its President and CFO, Hal Covert, has resigned from the company. Covert, who joined the company in July 2000, is leaving for personal reasons but will continue to serve as a consultant through the end of July. "Hal made a substantial contribution to SGI in helping us to define our operational model and to streamline our business processes, including the just completed implementation of an ERP system," said Bishop.

Jeffrey Zellmer, currently Corporate Controller at SGI, has been named to replace Covert as CFO. Bishop and Warren Pratt, EVP and COO, will assume Covert's other responsibilities. "Jeff Zellmer brings to the CFO role a strong history of financial leadership, having served SGI for over 12 years in increasingly responsible financial positions covering field, divisional and corporate activities," said Bishop. "I am confident that Jeff will execute a seamless transition and be highly effective in this role.

"SGI remains committed to its focus as the world's leader in high performance computing, visualization solutions and complex data management for technical and creative users," said Bishop.

These statements regarding estimated results are preliminary and are based on partial information and management assumptions. They also do not reflect the impact of restructuring or other special charges or the implementation of SAB 101 for FY 2001.

SGI will conduct a conference call today at 2:00 p.m. PDT to provide additional details. The dial-in number is: 888-208-1824 and the webcast site is www.sgi.com or www.streetfusion.com. An audio replay of this call will be available after 5:00 p.m. PDT today at 888-203-1112 (passcode: 464864). All links to the archived webcast and audio replay are available through SGI's web site at www.sgi.com/company_info/investors.

About SGI

SGI, also known as Silicon Graphics, Inc., is a technology solutions provider with a broad range of high-performance computing, advanced graphics, and consulting services that enable its technical and creative customers to maintain a competitive advantage in their core businesses. Whether being used to design and build safer cars and airplanes, discover new medications and oil reserves, helping us understand and better predict the weather, or entertain us with thrilling movie special effects, SGI systems and expertise are empowering a world of innovation and discovery. The Company, which is located on the Web at www.sgi.com , is headquartered in Mountain View, Calif., and has offices worldwide.

Safe Harbor Statement

This news release contains forward-looking statements regarding our business, objectives, financial condition and future performance. These forward-looking statements are subject to risks and uncertainties detailed from time to time in the Company's SEC filings, including its report on Form 10-Q for the quarter ended March 31, 2001. These include the risks of the Company's ability to achieve and sustain its current or higher levels of revenue, higher gross margins, reduced operating expenses, and sufficient operating cash. These risks and uncertainties could cause actual results to differ materially from those expressed or implied in such forward-looking statements.

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Date:Jul 9, 2001
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