SGI reports Q1, posts loss and hires new CFO

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SGI has reported financial results for its first fiscal quarter. The press release for this report is a little more impenetrable than usual, as SGI is in the habit of reporting every possible angle to put the good news (or news that can be spun as good) up front. But I did manage to pull out some useful quotes

SGI logo…”Throughout the quarter, SGI continued to hold its own in an economic environment that presented challenges around the world,” said Silicon Graphics CEO Robert “Bo” Ewald. “We saw solid Services revenue, continued to deliver our award-winning compute, storage and visualization solutions, and did the hard work necessary to reduce our operating costs.”

…”In reporting our results for what is seasonally a soft quarter, we were on track with the guidance we had provided earlier,” said Silicon Graphics Chief Financial Officer Kathy Lanterman. “During the quarter, we were able to reduce spending and, as a result, more effectively manage capital.”

When you look at the income statements, you do see some mild improvements, like a .7M reduction in operating expenses and a loss that’s $2.5M less than the same quarter a year ago. But the news is still pretty bad: $93M in revenue (up slightly), net losses $33.7M (down slightly). And when you look over the last four quarters of similar data, it doesn’t get better. Unless they have infinite cash to draw on, they don’t need slight improvements, they need a revolution.

Evidently they do agree that some change is called for. SGI also announced yesterday that their CFO, Kathy Lanterman, is being swapped out for Greg Wood.

Kathy Lanterman, who has been at the company for 10 years and served as CFO since 2006, will step down on Nov. 10, 2008. She will continue to work with the company for a few weeks to complete a smooth transition to Mr. Wood.

“Greg is an experienced public company CFO with a track record for increasing shareholder value and an extensive background in operations, IP monetization, strategic planning, business process improvement, and corporate governance,” said Silicon Graphics CEO Robert “Bo” Ewald. “We are delighted to welcome Greg to SGI and look forward to him joining our executive leadership team to help guide SGI through our next phase of transformation.”

I like SGI’s technology, and I have always believed that a more diverse HPC ecosystem is a better HPC ecosystem. I very much want them to succeed. My friends work there. But I don’t think more creative financing is their ticket to survival, so I hope to see them make more comprehensive strategy and restructuring announcements in the near future.