Cray has announced financial results for the year and fourth quarter ended December 31, 2014. Revenue for the fourth quarter was $261.9 million, compared to $307.4 million in the fourth quarter of 2013, down 15%. The Company reported net income for the fourth quarter of $74.6 million, or $1.84 per diluted share, compared to net income of $51.0 million, or $1.27 per diluted share in the prior year period.  Non-GAAP net income was $40.3 million, or $0.99 per diluted share for the quarter, compared to non-GAAP net income of $59.2 million, or $1.48 per diluted share for the same period last year.

For 2014, Cray reported total revenue of $561.6 million, which compares with $525.7 million for 2013.  Net income for 2014 was $62.3 million, or $1.54 per diluted share, compared to $32.2 million, or $0.81 per diluted share for 2013.  Net income results for 2014 benefited from a $52.6 million income tax benefit which resulted from a reduction of substantially all of the valuation allowance held against Cray’s U.S. deferred tax assets.  This reduction was determined after considering both past financial results and future expectations for profitability. 

Non-GAAP net income, which adjusts for selected unusual and non-cash items, such as the reduction of the valuation allowance, was $24.3 million, or $0.60 per diluted share for 2014, compared to $30.3 million, or $0.76 per diluted share for 2013.  

Overall gross profit margin for 2014 was 33%, compared to 35% for 2013.  Total non-GAAP gross profit margin for 2014 was 34%, compared to 36% for 2013.  The change in gross profit margin in 2014 was driven primarily by product mix.

Operating expenses for 2014 were $175.2 million, compared to $162.7 million for 2013.  Non-GAAP operating expenses for 2014 were $163.7 million, compared to $155.5 million for 2013.

As of December 31, 2014, cash, investments and restricted cash totaled $146 million.  Working capital increased $27 million to $362 million, compared to $335 million at the end of 2013.

“We had a great year, highlighted by company records in both revenue and new contract awards,” said Peter Ungaro, president and CEO of Cray.