8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) October 20, 2003

SILICON GRAPHICS INC.

(Exact name of Registrant as Specified in Charter)

Delaware	001-10441	94-2789662
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)
1600 Amphitheatre Parkway
Mountain View, CA		94043-1351
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (650) 960-1980

N/A (Former Name or Former Address, if Changed Since Last Report)

Item 7. Exhibits
(c)
99.1	Earnings Press Release dated October 20, 2003

Item 12. Results of Operations and Financial Condition

On October 20, 2003, the Company announced its financial results for the fiscal quarter ended September 26, 2003. A copy of the press release announcing the Company’s financial results is included as an exhibit to and incorporated by reference in this Current Report on Form 8-K. This Current Report on Form 8-K is furnished pursuant to Item 12 of Form 8-K and is not intended to be incorporated by reference into future filings under the Securities Exchange Act of 1934 or the Securities Act of 1933 unless expressly incorporated by reference in such filings.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: October 20, 2003	By:	/s/ Sandra M. Escher
		Sandra M. Escher
		Senior Vice President and
		General Counsel

EXHIBIT INDEX

EXHIBIT
NUMBER	DOCUMENT DESCRIPTION
99.1	Earnings Press Release dated October 20, 2003

EX-99.1

EXHIBIT 99.1

 

SGI REPORTS FIRST QUARTER RESULTS MOUNTAIN VIEW, Calif. (October 20, 2003)—SGI (NYSE: SGI) today announced results for its first fiscal quarter, which ended September 26, 2003. Revenue for the quarter was $218.0 million, compared with $240.2 million for the fourth quarter ended June 27, 2003. Gross margin increased to 43.4% in the first quarter from 40.3% in the fourth quarter. On a GAAP basis, operating expenses for the first quarter were $138.2 million, compared with $131.3 million for the fourth quarter. SGI’s first-quarter operating loss was $43.6 million, compared to $34.5 million in the fourth quarter. The first-quarter net loss was $47.9 million or $0.23 per share, compared with $36.6 million or $0.18 per share in the fourth quarter. The first-quarter results include $24.2 million in other operating expenses, consisting primarily of severance and non-cash charges relating to the previously announced headquarters consolidation compared with a charge of $12.6 million in the prior quarter. On a non-GAAP basis, excluding the $24.2 million in other operating expenses, first-quarter operating expenses were $113.9 million and the operating loss was $19.4 million, compared to operating expenses of $118.7 million and an operating loss of $21.9 million in the fourth quarter. The Company's first quarter results are consistent with the preliminary results announced on October 6, 2003. “We made significant progress in Q1,” said Bob Bishop, Chairman and CEO of Silicon Graphics. “Projections for revenue, gross margin and unrestricted cash were exceeded; operating expense levels were lowered, and major new storage and visualization products were launched. We hope to continue to improve in Q2 based on the strength of these new products and on increased customer confidence in SGI.”   —more— 1600 Amphitheatre Pkwy.
Mountain View, CA
94043 Telephone 650.960.1980
www.sgi.com MEDIA CONTACT
Lisa Pistacchio pistacchio@sgi.com
650.933.5683 SGI PR HOTLINE
650.933.7777 SGI PR FACSIMILE
650.933.0283

SGI REPORTS FIRST QUARTER RESULTS/2

As of September 26, 2003, unrestricted cash, cash equivalents, and marketable investments were $115.5 million, compared with $141.3 million at June 27, 2003.

SGI will conduct a conference call today at 2 p.m. PT to provide additional details. The dial-in number is (888) 208-1824 and the Webcast site is www.sgi.com. An audio replay of this call will be available after 5 p.m. PT today at (888) 203-1112 (passcode: 608105) and will be available for seven days. All links to the archived Webcast and audio replay are available through SGI's Web site at www.sgi.com/company_info/investors/. International investors can dial (719) 457-2637. The international replay number is (719) 457-0820 (passcode: 608105).

This news release contains forward-looking statements relating to future events or financial performance that involve risks and uncertainties. Forward looking-statements in this news release include, without limitation, statements regarding expectations about future financial results and customer perceptions about the company and its products. The company's future results could differ materially from the expectations discussed herein. Factors that might cause such a difference include risks associated with the timely development, production and acceptance of new products and services; increased competition; the failure to achieve expected product mix and revenue levels; the effect of uncertainty about the company's debt restructuring efforts; and the failure to manage costs and improve operating efficiencies. These and other risks are detailed from time to time in SGI's periodic reports that are filed with the Securities and Exchange Commission, including SGI's quarterly report on Form 10-K for the year ended June 27, 2003. We undertake no obligation to publicly update or revise any forward-looking statements, whether changes occur as a result of new information, future events or otherwise.

SGI: The Source of Innovation and Discovery™

SGI, also known as Silicon Graphics, Inc., is the world’s leader in high-performance computing, visualization and storage. SGI’s vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it’s sharing images to aid in brain surgery, finding oil more efficiently, studying global climate or enabling the transition from analog to digital broadcasting SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. SGI was named on FORTUNE magazine’s 2003 list of “Top 100 Companies to Work For.” With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at www.sgi.com.

—end—

Silicon Graphics, SGI and the SGI logo are registered trademarks, and The Source of Innovation and Discovery is a trademark of Silicon Graphics, Inc., in the U.S. and/or other countries worldwide. All other trademarks mentioned herein are the property of their respective owners.

SILICON GRAPHICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

		September 26,			June 27,
		2003			2003
ASSETS
Current assets:
Cash and cash equivalents	$	114,219		$	140,836
Short-term marketable investments		1,284			440
Short-term restricted investments		27,757			35,298
Accounts receivable, net		118,051			133,166
Inventories		72,455			71,426
Prepaid expenses and other current assets		43,298			51,727
Total current assets		377,064			432,893
Restricted investments		902			1,430
Net property and equipment		87,344			108,062
Other assets		100,273			107,469
	$	565,583		$	649,854
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	68,014		$	76,507
Accrued compensation		32,055			38,916
Income taxes payable		22,781			22,666
Other current liabilities		125,320			126,987
Current portion of long-term debt		248,409			16,894
Deferred revenue		138,267			149,434
Total current liabilities		634,846			431,404
Long-term debt		57,797			291,956
Other liabilities		84,500			91,385
Total liabilities		777,143			814,745
Total stockholders' deficit		(211,560	)		(164,891	)
	$	565,583		$	649,854

SILICON GRAPHICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share amounts)

	Three Months Ended
	September 26,			September 27,
	2003			2002
Product and other revenue	$	124,866		$	133,483
Service revenue		93,161			108,235
Total revenue		218,027			241,718
Costs and expenses:
Cost of product and other revenue		71,264			81,624
Cost of service revenue		52,177			62,655
Research and development		35,349			42,643
Selling, general and administrative		78,599			86,777
Other operating expense (1)		24,236			8,444
Total costs and expenses		261,625			282,143
Operating loss		(43,598	)		(40,425	)
Interest and other income (expense), net		(6,498	)		(560	)
Other non-recurring income (expense)		(414	)		-
Loss before income taxes		(50,510	)		(40,985	)
Income tax provision		(2,581	)		87
Net loss	$	(47,929	)	$	(41,072	)
Net loss per common share - basic and diluted	$	(0.23	)	$	(0.21	)
Shares used in the calculation of net loss per common share. . .		209,570			199,676

(1) Represents charges for estimated restructuring and asset impairments in each of the three month periods ended September 26, 2003 and September 27, 2002.