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Silicon Graphics International Corporation (SGI)
F4Q2011 Earnings Call
August 18, 2011 5:00 pm ET
Jason Golz – IR
Mark Barrenechea – President & CEO
Jim Wheat – SVP & CFO
Brian Freed – Wunderlich Securities
Alex Kurtz – Sterne Agee
Shebly Seyrafi – FBN Securities
Tim Quinlisk – Mayo Capital
Mike Shinnick – Wasatch
Previous Statements by SGI
» Silicon Graphics CEO Discusses F3Q11 Results - Earnings Call Transcript
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Thank you, Tyron. And good afternoon, everyone. Thank you for joining us to discuss our fourth quarter and fiscal year 2011 financial earnings results. On the call today are Mark Barrenechea, SGI’s CEO, and Jim Wheat, SGI’s CFO. Our fourth quarter and fiscal year 2011 financial results were released just after today’s market close. Our press release and earnings slide presentation are available on the IR section of our website at investors.sgi.com.
We have arranged for an audio replay of today’s call, which will also be available for five days. A replay of the webcast will be available two hours after the conclusion of the call and will remain available on our website until the next call. The date of the call today is August 18. This call is property of SGI, and any recording, reproduction or transmission of this conference call without the expressed written prior consent of SGI is strictly prohibited.
Before I turn the call over to Mark, I’d like to call your attention to the Safe Harbor disclosure in our earnings release regarding forward-looking information. Today’s earnings call includes forward-looking statements and projections, including financial projections for fiscal ‘12, market growth projections and product development plans.
There can be no assurances that we will achieve these projected results, and we ask that you refer to our most recent filings with the SEC for important risk factors that could cause actual results to differ materially from these projections. We do not undertake any obligation to update our forward-looking statements except to the extent required by law.
To obtain copies of our latest SEC filings, please visit sec.gov or visit our website at investors.sgi.com. Additionally, we note that we continue to use and refer to certain non-GAAP measures. The non-GAAP figures that we present on today’s call are also contained in our earnings release along with a reconciliation to the applicable GAAP metric.
We are pleased to let you know that SGI will host an Analyst Day on September 22 in New York City, where management will be on hand to discuss SGI’s strategy and growth trajectory. We are excited about our presentation, and we look forward to meeting many of you. Additionally, SGI will be presenting at a number of conferences next month.
We will be at the ThinkEquity Growth Conference on September 13 in New York City, the Deutsche Bank Securities Conference on September 15 in Las Vegas, and the Credit Suisse Small and Mid-Cap Conference on September 27, also in New York City. Please join us via webcast if you are unable to attend the conferences.
I would now like to turn the call over to Mark Barrenechea, SGI’s CEO. Mark?
Thank you, Jason. And welcome, everyone, to our fourth quarter and year-end earnings call. This is certainly an interesting data at an earnings call with many companies downgrading growth and earnings. This is not our view of our world. We grew revenues in fiscal 2011 by 22%, and we expect to grow revenues up to 24% in fiscal 2012 while growing our earnings. Let me get into the details.
Fiscal 2011 was a pivotal year for the new SGI in so many years. It was a successful financial year with record revenues, right-line non-GAAP profitability, growth at near three times the market rate, cash growth, and a debt-free balance sheet. Looking beyond our financial results, it was an even stronger year of customer successes, new product introductions, expansion of our worldwide delivery capabilities, while building the framework as we strive to reach our first $1 billion in annual revenues. Our employees are customer-centric and passionate about being the trusted leader in technical computing. Unlike anything I have seen in the industry, their dedication is unparalleled.
Let me highlight our non-GAAP results for fiscal 2011. Our revenue grew 22% to $642 million, gross margin improved to 92.2%, achieved EPS of $0.55, and we ended the year with $143.2 million in cash and debt free. On today’s call, I’ll look back and make a few observations about our industry and our business. I’ll then turn the call over to Jim so he can provide more details on our financials. And finally, before taking your questions, I’ll provide a look-ahead on what we see on the horizon.
As we look back on fiscal 2011, several things have become clear. First, we are in the right industry. Second, we have the right strategy. And third, we have executed and have the right leadership and have a performance-driven culture to continue to execute and scale.
Let me comment on the right industry. The technical computing industry lies at the end of the spectrum where customers demand speed and scale over all other factors. This is because the applications they run are their business compared to the other end of the spectrum where applications are used to support their business.