APPLICATIONS

SEATTLE, WA -- Supercomputer provider Cray Inc. (Nasdaq:CRAY) today announced that it expects to be modestly profitable for the 2002 first quarter before one-time realignment charges. The cost reductions and realignment charges, amounting to more than $5 million on an annualized basis, are related primarily to a workforce reduction of about 20 persons taking place this week. Most of the reductions involve R&D personnel. Cray officials said previously that they planned to reduce R&D expenditures as the company neared the end of a period in which multiple new supercomputer systems were being developed. The company began shipping new Cray SV1ex(TM) enhanced-memory systems and Cray MTA-2(TM) multithreaded systems in the fourth quarter of 2001, and expects to begin shipping the code-named Cray SV2(TM) system in the second half of 2002. ``We are approaching the end of a period requiring unusually high R&D investment to position Cray Inc. for future growth and industry leadership,'' said Cray chairman and CEO Jim Rottsolk. ``At this point, we can modestly reduce that investment without affecting progress in our crucial Cray SV2 development and other continuing R&D activities.'' Cray plans to report financial results for the 2002 first quarter on May 1, 2002.