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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
DATE OF REPORT: OCTOBER 27, 1997
(Date of earliest event reported)
SILICON GRAPHICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-10441 94-2789662
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
2011 N. SHORELINE BOULEVARD, MOUNTAIN VIEW, CALIFORNIA 94043-1389
(Address of principal executive offices) (Zip Code)
(415) 960-1980
(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On October 27, 1997, Silicon Graphics, Inc. issued a press release regarding
its results for the quarter ended September 30, 1997, a copy of which is
attached hereto as Exhibit 99.1 and incorporated herein by reference.
On October 29, 1997, Silicon Graphics, Inc. issued three press releases
regarding senior management changes and a restructuring program, copies of
which are attached hereto as Exhibit 99.2 and incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit 99.1 Press release of Silicon Graphics, Inc. dated October 27, 1997.
Exhibit 99.2 Press releases of Silicon Graphics, Inc. dated October 29, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on the date indicated.
Dated: October 31, 1997
SILICON GRAPHICS, INC.
(Registrant)
By: /s/ William M. Kelly
---------------------------
William M. Kelly
Senior Vice President,
Corporate Operations
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EXHIBIT 99.1
Contact: Marilyn Lattin (415) 933-5070
Director, Investor Relations
Media: Kevin Burr (415) 933-5411
Director, Public Relations
SILICON GRAPHICS REPORTS FIRST QUARTER RESULTS
MOUNTAIN VIEW, Calif. (October 27, 1997) -- Silicon Graphics, Inc. (NYSE:
SGI) today announced results for its first quarter ended September 30, 1997
which were consistent with its preliminary release on October 6, 1997.
Silicon Graphics' revenue for the first quarter of fiscal 1998 was $768
million, compared to $766 million in the same quarter a year ago. Excluding
special charges, the company's net loss was $37 million or $0.20 per share.
"Our disappointing first quarter results are due largely to a shortfall in
our server business, particularly in the United States. We are taking steps
to strengthen our sales and marketing efforts in support of our server
product family," said Edward R. McCracken, chairman and chief executive
officer. The company also said that it expects this quarter to implement a
program to reduce its operating expenses to a level consistent with current
business conditions.
Reported first quarter results included $17 million in charges related to the
company's acquisition of ParaGraph International and other merger-related
expenses of $2 million. Including those special charges, the company's net
loss for the first quarter was $56 million, or a loss of $0.31 per share,
compared with a net loss of $22 million, or $0.13 per share, in the first
quarter of fiscal 1997.
The company's cash position increased significantly during the first quarter,
as a result both of the collection of accounts receivable from the strong
June quarter as well as improved asset management execution. Cash, cash
equivalents and marketable
--more--
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SILICON GRAPHICS REPORTS FIRST QUARTER RESULTS
2-2-2-2
investments, were $657 million at September 30, 1997. The company's backlog
at September 30, 1997 was $398 million.
- -------------------------------------------------------------------------------
Except for the historical information contained herein, the matters discussed
in this news release are forward-looking statements that involve risks and
uncertainties, detailed form time to time in the company's SEC reports,
including the report on Form 10-K for the year ended June 30, 1997.
- -------------------------------------------------------------------------------
Silicon Graphics, Inc. is a leading supplier of high-performance interactive
computing systems. Silicon Graphics and its subsidiaries have office
throughout the world and headquarters in Mountain View, CA.
--more--
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SILICON GRAPHICS REPORTS FIRST QUARTER RESULTS
3-3-3-3
SILICON GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended
Sept. 30, Sept 30,
1997 1996
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(unaudited)
Product and other revenue ............... $ 620,696 $ 623,413
Service revenue.......................... 147,297 142,189
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Total revenue.......................... 767,993 765,602
Costs and expenses:
Cost of product and other revenue...... 351,660 372,960
Cost of service revenue................ 86,263 77,735
Research and development............... 116,354 108,279
Selling, general and administrative.... 261,421 232,167
Write-off of acquired in-process
technology and merger-related
expenses............................. 19,101 2,834
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Total costs and expenses........... 834,799 793,975
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Operating loss........................... (66,806) (28,373)
Interest and other expense, net.......... (2,307) (818)
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Loss before income taxes................. (69,113) (29,191)
Benefit for income taxes................. (13,575) (7,590)
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Net loss................................. (55,538) (21,601)
Preferred stock dividend requirement..... (131) (131)
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Net loss available to common
stockholders........................... $ (55,669) $ (21,732)
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Net loss per common share................ $ (0.31) (0.13)
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Common shares and common share equivalents
used in the calculation of net loss per
common share........................... 182,160 172,974
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--more--
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SILICON GRAPHICS REPORTS FIRST QUARTER RESULTS
4-4-4-4
SILICON GRAPHICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
Sept. 30, June 30,
1997 1997
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(unaudited)
ASSETS
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Current assets:
Cash and cash equivalents.............. $ 484,605 $ 227,222
Short-term marketable investments...... 115,438 60,109
Accounts receivable, net............... 694,775 1,131,647
Inventories............................ 631,011 628,064
Prepaid expenses and other current
assets............................... 258,086 268,552
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Total current assets................. 2,183,915 2,315,594
Other marketable investments............. 57,208 86,961
Net property and equipment............... 520,347 525,452
Other assets............................. 494,697 416,585
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$3,256,167 $3,344,592
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Accounts and notes payable............. $ 201,848 $ 303,647
Other current liabilities.............. 767,718 782,559
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Total current liabilities............ 969,566 1,086,206
Long-term debt and other................. 421,058 419,144
Total stockholders' equity............... 1,865,543 1,839,242
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$3,256,167 $3,344,592
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EXHIBIT 99.2
Financial Contact: Marilyn Lattin, 650-933-5070 FOR IMMEDIATE RELEASE
Director, Investor Relations
[email protected]
Media Contact: Kevin Burr, 650-933-5411
Director, Public Relations
[email protected]
SILICON GRAPHICS ANNOUNCES LEADERSHIP TRANSITION
MOUNTAIN VIEW, Calif. (Oct. 29, 1997) Silicon Graphics, Inc. (NYSE:SGI)
today announced that Edward R. McCracken, chairman and chief executive
officer, has informed the board of directors of his intention to step down
from his role as chief executive officer. McCracken has agreed at the request
of the board of directors to continue as chairman and chief executive officer
during the search for a successor.
"I've decided that now is the right time for the company and for me
personally to make a change," said McCracken. "When I joined Silicon
Graphics in 1984, it was a one-hundred person graphics company with great
people and ambitious objectives. Today we are the world's leader not only in
graphics but in the entire high-performance computing market. I've been
proud to be associated with the talented and innovative people of Silicon
Graphics, and I'm looking forward to continuing in a strategic role with the
company. I'm very confident that Silicon Graphics will continue to grow
under new leadership, and I'm committed to making the transition successful."
James A. McDivitt, a member of the board of directors since 1987, said, "The
board understands and respects Ed's decision to change his role in the
company at this time. Ed has made a remarkable contribution in building
Silicon Graphics, and we value his vision and achievements. The board has
been closely involved in reviewing the strategy and operations of the company
and is highly confident about its future success. We believe the company is
addressing the operational issues that have affected its performance and want
to express our support for the management team in implementing the company's
plans."
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Silicon Graphics, Inc. is a leading supplier of high-performance interactive
computing systems. Silicon Graphics and its subsidiaries have offices
throughout the world and corporate headquarters in Mountain View, California.
<PAGE>
MEDIA CONTACTS: FOR IMMEDIATE RELEASE
Kevin Burr, 650-933-5411
[email protected]
John Thompson, 650-933-8515
[email protected]
SILICON GRAPHICS EXECUTIVE VICE PRESIDENT GARY LAUER RESIGNS;
ROBERT EWALD TO SERVE AS ACTING CHIEF OPERATING OFFICER
MOUNTAIN VIEW, Calif. (Oct. 29, 1997) -- Silicon Graphics, Inc. (NYSE:SGI)
today announced that Gary L. Lauer has resigned as executive vice president
of Worldwide Field Operations and as president of the company's World Trade
Corporation. The company also announced that Robert H. Ewald, executive vice
president of Computer Systems, will serve as acting chief operating officer,
with responsibility for product development and manufacturing, sales and
marketing.
"Gary has made a major contribution to Silicon Graphics," said Edward R.
McCracken, chairman and chief executive officer of Silicon Graphics. "He has
been instrumental in building a sales organization that has driven our growth
over the past nine years."
Lauer joined Silicon Graphics in July 1988 as vice president of North
American Marketing and went on to build the company's U.S. sales organization
as senior vice president of North American Field Operations. He became
executive vice president, running Worldwide Field Operations, in July 1995.
"I've asked Bo to step into this broader operating role while we seek new
leadership for the sales and marketing organization," said McCracken. "This
acting assignment, in addition to Bo's other duties running product
development and manufacturing operations, ensures a hands-on approach to our
core operations during this transition period."
Silicon Graphics, Inc. is a leading supplier of high-performance interactive
computing systems. Silicon Graphics and its subsidiaries have offices
throughout the world and headquarters in Mountain View, California.
<PAGE>
Financial Contact: Marilyn Lattin, 650-933-5070 FOR IMMEDIATE RELEASE
Director, Investor Relations
[email protected]
Media Contact: Kevin Burr, 650-933-5411
Director, Public Relations
[email protected]
SILICON GRAPHICS ANNOUNCES RESTRUCTURING PROGRAM
MOUNTAIN VIEW, Calif. (Oct. 29, 1997) -- Silicon Graphics, Inc. (NYSE:SGI)
today announced that it will implement a restructuring program in the
December quarter to reduce its operating expense levels. The company said the
restructuring moves will enable it to operate more efficiently and
profitably, while increasing its investment in next-generation programs.
The program will include a reduction in workforce that is expected to
eliminate 700 to 1,000 positions worldwide, including contractors. The
company expects to take a restructuring charge in the current quarter of
approximately $50 million, the majority of which is attributable to the
workforce reductions.
Silicon Graphics, Inc. is a leading supplier of high-performance interactive
computing systems. Silicon Graphics and its subsidiaries have offices
throughout the world and headquarters in Mountain View, California.