April 30, 2013
SEATTLE, Wash., April 30 — Global supercomputer leader Cray Inc. today announced financial results for the first quarter ended March 31, 2013. Revenue for the quarter was $79.5 million compared to $112.3 million in the prior year period. Cray reported a net loss for the quarter of $7.6 million or $0.20 per share compared to net income of $5.0 million or $0.13 per share in the first quarter of 2012.
Please note, all figures in this release are based on U.S. GAAP unless otherwise noted. A reconciliation of GAAP measures to non-GAAP measures is included with the financial tables of this press release. Non-GAAP net loss, which adjusts for selected unusual and non-cash items, was $8.4 million or $0.23 per share, for the first quarter of 2013, compared to non-GAAP net income of $9.0 million, or $0.24 per share, for the first quarter 2012.
Total gross profit margin for the first quarter of 2013 was 30% compared to 40% for the first quarter of 2012. Non-GAAP total gross profit margin for the first quarter of 2013 was 32%. For the first quarter of 2013, product margin was 24% and service margin was 50%. Product margin for the first quarter of 2013 was negatively impacted in part by non-cash items related to the acquisition of Appro and the weakening of the Japanese Yen.
Operating expenses for the first quarter of 2013 were $36.9 million, consistent with the prior year period. Non-GAAP operating expenses for the first quarter of 2013 were $35.2 million.
The first quarter of 2013 operating results included $2.8 million for depreciation. Non-cash, pre-tax items excluded for non-GAAP purposes for the first quarter of 2013 were $0.6 million for amortization of acquired and other intangibles, $1.0 million for purchase accounting adjustments, and $1.7 million for stock compensation expense.
As of March 31, 2013, cash and investments totaled $251 million compared to $323 million as of December 31, 2012. Working capital at the end of the first quarter was $283 million, unchanged compared to December 31, 2012.
“We had a solid first quarter,” said Peter Ungaro, president and CEO of Cray. “In HPC, our latest generation XC30 supercomputer is off to a strong start with a number of big wins and is shipping to customers around the world, and our new CS300 cluster is gaining traction. In Big Data, our storage and graph analytics offerings are continuing to make progress in this fast growing market. While we have a lot of work left to do in order to achieve our outlook, we remain on track to deliver strong revenue growth and I'm excited about our prospects for the rest of the year.”
While a wide range of results remains possible for 2013, we expect revenue to be approximately $500 million for the year. Revenue is expected to ramp quarterly during 2013 with roughly $80 million in the second quarter and about 45% of the annual revenue expected in the fourth quarter. For 2013, overall gross margins are anticipated to be in the mid-30% range. Total operating expenses for 2013 are expected to be in the range of $160 million. Non-GAAP adjustments to pre-tax earnings are anticipated to be over $10 million in 2013, driven by stock-based compensation and acquisition related expenses. Based on this outlook, we expect to be profitable on a GAAP and non-GAAP basis for 2013.
Cray’s 2013 effective income tax rate is currently projected to be about 40% but is dependent on a number of variables. Based on this outlook, due to Cray’s substantial net operating loss carryforwards, the annual income tax provision is expected to be largely non-cash and the effective non-GAAP tax rate is expected to be 7-10%.
Actual results for any future period are subject to large fluctuations given the nature of Cray’s business.
About Cray Inc.
Global supercomputing leader Cray Inc. provides innovative systems and solutions enabling scientists and engineers in industry, academia and government to meet existing and future simulation and analytics challenges. Leveraging 40 years of experience in developing and servicing the world's most advanced supercomputers, Cray offers a comprehensive portfolio of high performance computing (HPC) systems, storage, and Big Data solutions delivering unrivaled performance, efficiency and scalability. Cray's Adaptive Supercomputing vision is focused on delivering innovative next-generation products that integrate diverse processing technologies into a unified architecture, allowing customers to surpass today's limitations and meeting the market's continued demand for realized performance.
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