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July 29, 2014

Cray Reports Second Quarter 2014 Financial Results

SEATTLE, Wash., July 29 — Global supercomputer leader Cray Inc. today announced financial results for the second quarter ended June 30, 2014.

All figures in this release are based on U.S. GAAP unless otherwise noted.  A reconciliation of GAAP to non-GAAP measures is included in the financial tables in this press release.  Given the nature of the business, the Company’s results can fluctuate dramatically quarter-to-quarter.

Revenue for the quarter was $85.1 million and compares to $84.5 million in the prior year period.  The Company reported a net loss for the quarter of $6.7 million, or $0.18 per diluted share, compared to a net loss of $0.2 million, or $0.00 per diluted share in the second quarter of 2013.  Non-GAAP net loss was $8.6 million, or $0.22 per diluted share for the quarter, compared to $7.0 million, or $0.19 per diluted share for the same period last year.

Overall gross profit margin for the second quarter of 2014 was 34% compared to 32% for the second quarter of 2013.  Total non-GAAP gross profit margin for the second quarter of 2014 was 35% compared to 33% for the second quarter of 2013.

Operating expenses for the second quarter of 2014 were $42.8 million compared to $36.6 million for the prior year period.  Non-GAAP operating expenses for the second quarter of 2014 were $39.9 million, compared to $35.0 million for the prior year period.  The increase in 2014 GAAP and non-GAAP operating expenses was driven largely by the Company’s investments in big data.

As of June 30, 2014, cash, investments and restricted cash totaled $211.6 million compared to $278.6 million at March 31, 2014.  Working capital at the end of the second quarter was $300.5 million, compared to $314.9 million at the end of the first quarter.

“Over the last few months we’ve been on an incredible run of customer wins in both the U.S. and around the world,” said Peter Ungaro, president and CEO of Cray.  “These awards, some of them multi-year in nature, reaffirm our belief that we’re in a great position to continue to grow, not only in 2014 but also over the coming years.  Our products are competitively strong, with each of our development roadmaps being driven by the continuing convergence of supercomputing and big data we’re seeing in the market.  We believe we’re in a great position to capitalize on this exciting market evolution and to continue to build on our market leadership.”

Outlook

For 2014, while a wide range of results remains possible, the Company anticipates revenue to be in the range of $600 million for the year and, as previously indicated, to be heavily weighted to the fourth quarter as has been typical in recent years.  Revenue is expected to be about $125 million for the third quarter.  Non-GAAP gross margin for 2014 is anticipated to be in the mid-30% range.  Total non-GAAP operating expenses for the year are anticipated to be about $175 million.  Based on this outlook, the Company expects to be profitable on both a GAAP and non-GAAP basis for 2014.

The Company’s 2014 effective non-GAAP tax rate is expected to be about 10%.

Actual results for any future period are subject to large fluctuations given the nature of Cray’s business.

Recent Highlights

Conference Call Information

Cray will host a conference call today, Tuesday, July 29, 2014 at 1:30 p.m. PDT (4:30 p.m. EDT) to discuss its second quarter financial results.  To access the call, please dial into the conference at least 10 minutes prior to the beginning of the call at (866) 362-9806. International callers should dial (765) 889-6838.  To listen to the audio webcast, go to the Investors section of the Cray website at http://investors.cray.com.

If you are unable to attend the live conference call, an audio webcast replay will be available in the Investors section of the Cray website for 180 days.  A telephonic replay of the call will also be available by dialing (855) 859-2056, international callers dial (404) 537-3406, and entering the access code 78154099.  The conference call replay will be available for 72 hours, beginning at 4:30 p.m. PDT on Tuesday, July 29, 2014.

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 more than 40 years of experience in developing and servicing the world’s most advanced supercomputers, Cray offers a comprehensive portfolio of supercomputers and big data storage and analytics 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 meet the market’s continued demand for realized performance. Go to www.cray.com for more information.

Source: Cray Inc.

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