SGI announced its fiscal results today for the quarter ending December 26, 2008. Revenue was down, and losses were up compare to the preceding quarter
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.
Bookings were up to $68M, from $58M in quarter one, and the backlog grew q/q as well. Something to keep in mind is that bookings don’t include services, so the quarterly run rate for the company is about $100M, according to CTO Greg Wood.
In looking at Q2 results its important to keep in mind that the company had a “restructuring” (read, layoff) in December near the end of the quarter. The Q2 results have the charge for that action (termination of leases, employee severance packages) but not the benefits, which Wood estimated on the earnings call today will be about $30M annually. Notably the operating expenses are down compared to Q1, which Wood credited to the headcount reduction in Q1, which indicates that we really can expect to see some benefit from the Q2 action.
Two other items to note that came out during this call. In December the company reached an agreement with creditors to delay repayment of outstanding debts, which had been due to enter repayment in December, for two years. While they noted that this was a positive outcome for the business in the short term, both Wood and Ewald touched on their goal to achieve a comprehensive restructuring of the company’s debt moving forward.
Regarding the NASDAQ delisting notice that the company received in December when its market cap fell below listing treshholds, the company announced that due to the especially negative financial climate NASDAQ has relaxed its compliance timeframes, and has given SGI until March 2 to raise its stock price sufficiently to acheive a market cap of $35M. Neither Wood nor Ewald commented on the likelihood of that happening, but then if they could predict the market successfully they would probably be in a different line of work.