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Wednesday, October 18, 2006

The Return of SGI

Rememer SGI? Silicon Graphics?

They are back, and out of Chapter 11. They even plan to return under the ticker "SGIC" on NASDAQ. You probably won't want to go back digging though for those old SGI NYSE certificates or the ones that went to the Pink Sheets, because those are really probably not worth the "sheet" they are printed on.

The company, the "Newco" SGI issued 11,125,000 shares of new SGI common stock to certain SGI creditors in satisfaction of claims and upon exercise of stock purchase rights and overallotment options. SGI's prior common stock has been canceled as of an October 16, 2006 effective date with no distribution made to holders of such stock. In short, the old shares are only good for souvenirs, wallpaper, toilet paper, and notepads.

For more information you can see it in the total press release here.

The company (as of June 30, 2006 year-end) is still running at losses. A full copy of the annual report can be found here. They are running at less than half of revenues compared to what they were in 2002. The company for fiscal 2006 posted revenues of $518.8 million and posted a net loss of $146.19 million; compared to sales of $1.277 Billion and a loss of $46.3 million for fiscal June 2002.

The good news is that the new board of directors looks like it understands "what the company will have to do" to entice re-investors in the public stock markets. Understanding is different than delivering, so we'll have to see if they can really turn the new SGI around and get its sales back up and actually post profits. Here is the board make-up.


This is also the new description of the company:

SGI delivers a complete range of high-performance server and storage solutions along with industry-leading professional services and support that enable its customers to overcome the challenges of complex data-intensive workflows and accelerate breakthrough discoveries, innovation and information transformation. SGI helps customers solve their computing challenges whether it's enhancing the quality of life through drug research, designing and manufacturing safer and more efficient cars and airplanes, studying global climate, providing technologies for homeland security and defense, or helping enterprises manage large data. With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at www.sgi.com.

Maybe this is the same surprise that the Hobbits had when they saw Gandalf return, and we'll have to wait to see in time if it turns out to be as happy and as successful.

Jon C. Ogg
October 18, 2006
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