INDUSTRY

MOUNTAIN VIEW, CA -- SGI (NYSE: SGI - news) today announced results for its third fiscal quarter, which ended March 29, 2002. Revenue for the third quarter was $314 million, compared with $364 million in the preceding quarter. Gross margin increased to an industry-leading 42.5%. As a result of these factors, SGI's third-quarter operating loss was $9.8 million on a pro forma basis excluding restructuring charges. On a GAAP basis, the operating loss for the third quarter was $20.3 million. SGI reported a net profit of $10.3 million or earnings of $0.05 per share on a GAAP basis. This includes an accrued tax refund of approximately $30 million resulting from recent changes in U.S. tax laws. ``Even as the worldwide economic environment remains tough, we are realizing visible benefits from the structural improvements we've made in our business model. Many of the sectors we address are impacted by the economy, but we are happy with the performance of our government and defense sector,'' said Bob Bishop, chief executive officer of SGI. ``We continue to invest in demand generation, innovative new products and global marketing programs to power us into the future.'' As of March 29, 2002, unrestricted cash, cash equivalents and marketable investments were $172 million, compared with $120 million for the previous quarter. This cash increase is due to positive cash generated by operations and improved working capital. It does not reflect the tax refund, which was received in the fourth quarter.