ACADEMIA

SGI announced preliminary financial results for the third fiscal quarter ended March 25, 2005. The Company is projecting quarterly revenue of approximately $160 million and an estimated operating loss of approximately $45 million. The projected operating loss includes restructuring charges of approximately $15 million incurred primarily in connection with the restructuring actions that were initiated in February 2005. Without these charges, the non-GAAP operating loss is expected to be approximately $30 million. In its January 25, 2005 conference call, the Company had previously forecast revenue for the third quarter in the range of $180 million to $200 million. "Although the newly launched Silicon Graphics PRISM visualization system is off to a good start, several large server and storage deals failed to close at the end of the quarter," said Bob Bishop, chairman and CEO of SGI. "Actions to strengthen sales and marketing while continuing to reduce expenses are our main focus." The Company also announced today that it has sold a portion of its interest in SGI Japan to a group of Japanese investors for approximately $29 million in cash. On March 31, 2005, SGI sold approximately 16% of the outstanding stock of SGI Japan to Canon Sales Co., Inc., NIWS Co., Ltd and SOFTBANK Media & Marketing Corp. SGI retains an interest of approximately 24% in SGI Japan, which is its exclusive distributor for the Japanese market. Because the sale was completed after the end of SGI's third fiscal quarter, the proceeds will not be reflected SGI's balance sheet at March 25, 2005. Excluding the proceeds of the sale of equity in SGI Japan, SGI expects to report unrestricted cash, cash equivalents and marketable investments at March 25, 2005 of approximately $87 million. Actual results for the third quarter, along with guidance for the fourth quarter of fiscal 2005, will be discussed in the Company's regularly scheduled conference call on April 19, 2005.