ACADEMIA

MOUNTAIN VIEW, CA -- SGI (NYSE: SGI) announced results for its fourth fiscal quarter and fiscal year 2002, which ended June 28, 2002. Revenue for the fourth quarter was $285 million, compared with $314 million in the preceding quarter. Gross margin was industry leading at 41.2%. The GAAP operating loss for Q4 was $18.7 million, compared with an operating loss of $20.3 million for the previous quarter, and an operating loss of $207.1 million during the same quarter a year ago. The results are in line with the guidance provided in the company's July 8 press release. "Cash, gross margins, bookings growth and working capital improvement are all positive indicators," said Bob Bishop, chairman and CEO. "Our federal business is strong and represents in excess of 30% of our revenue. Although our customers appreciate our consistent product quality and product roadmap, we are experiencing longer buying-decision cycles in the private industry sector." Excluding restructuring activity, operating expenses for the fourth quarter fiscal year 2002 were $140 million and the company had a pro forma operating loss of $22.3 million. This compares with operating expenses of $143 million and an operating loss of $9.8 million for the previous quarter. Revenue for fiscal year 2002 was $1.3 billion, compared with $1.9 billion for fiscal year 2001. Net operating loss for the year was $101 million, compared with a loss of $448 million for fiscal year 2001. Reflecting on the 2002 fiscal year, Bishop went on to say, "Our balance sheet has strengthened. Unrestricted cash substantially increased. Costs are down. Products are highly competitive and we have a stable, experienced management team. The company is fundamentally transformed and poised for success." As of June 28, 2002, unrestricted cash, cash equivalents and marketable investments were $218 million compared with $172 million in the previous quarter and $126 million for the same quarter one year ago. Net working capital improved by $138 million during the year.