Cray Reports First Quarter 2016 Financial Results 

SEATTLE, Wash., May 4 -- Global supercomputer leader Cray Inc. (NASDAQ: CRAY) has announced financial results for the first quarter ended March 31, 2016.

All figures in this release are based on U.S. GAAP unless otherwise noted. A reconciliation of GAAP to non-GAAP measures is included in the financial tables in this press release.

Revenue for the first quarter of 2016 was $105.5 million, which compares with $79.6 million in the first quarter of 2015. Net loss for the first quarter of 2016 was $5.0 million, or $0.13 per diluted share, compared to a net loss of $9.4 million, or $0.24 per diluted share in the first quarter of 2015. Non-GAAP net loss was $5.3 million, or $0.13 per diluted share for the first quarter of 2016, compared to non-GAAP net loss of $10.9 million, or $0.28 per diluted share for the same period of 2015.

Overall gross profit margin for the first quarter of 2016 was 38%, compared to 30% for the first quarter of 2015. Total non-GAAP gross profit margin percentage for the first quarter of 2016 was consistent with the GAAP result for the same period.

Operating expenses for the first quarter of 2016 were $49.2 million, compared to $40.9 million for the first quarter of 2015. Non-GAAP operating expenses for the first quarter of 2016 were $46.3 million, compared to $37.8 million for the first quarter of 2015.

As of March 31, 2016, cash, investments and restricted cash totaled $320 million. Working capital increased to $418 million compared to $415 million at the end of 2015.

"We are off to a good start to our year," said Peter Ungaro, president and CEO of Cray. "We completed several large installations during the first quarter including at the Department of Energy's National Energy Research Scientific Computing Center. Our momentum in the global weather forecasting market also continued as we completed acceptances at Australia's Bureau of Meteorology, and the U.K.'s Met Office; and Germany's National Meteorological Service recently chose to substantially upgrade its Cray systems. With major refreshes in each of our product lines expected in 2016 and more contracts yet to secure in the coming quarters, we have a lot of work left to do in order to achieve our outlook for the year. That being said, I'm pleased with the progress we have made to date as we drive to continue to grow our business."

Outlook

For 2016, a wide range of results remains possible for each remaining quarter and the year.

While the Company continues to expect revenue to be in the range of $825 million for the year, there is an increased level of risk to achieving this target. This increased risk is driven by the Company's reliance on key third-party components, some of which have already been delayed, and the level and timing of new orders. Revenue is expected to be in the range of $100 million for the second quarter and the fourth quarter is anticipated to be about 60% of total revenue for the year. Non-GAAP gross margin for the year is expected to be in the range of 33%. Non-GAAP operating expenses for the year are anticipated to be about $205 million. Based on this outlook, the Company expects to improve its GAAP and non-GAAP operating profit margins for 2016 as compared to 2015.

Cray's 2016 effective non-GAAP tax rate is expected to be about 10%.

Actual results for any future periods are subject to large fluctuations given the nature of Cray's business.

Recent Highlights

• In April, Cray announced that Germany's National Meteorological Service (DWD) selected to upgrade and expand its Cray XC supercomputers and Sonexion storage systems. DWD is one of the world's premier numerical weather prediction centers and the upgraded Cray systems will allow it to continue to improve its highly-complex models for providing more accurate weather forecasts for a wide array of weather responsibilities.
• In April, in order to support its long-term growth, Cray announced it had signed a lease to be the new anchor tenant at The Offices @ Mall of America in Bloomington, Minnesota. Under the terms of the agreement, Cray will lease approximately 87,500 square feet of new office space in the top four floors of the 10-story building. Additionally, Cray has options to expand further in the building if necessary.
• In April, Brian Turner joined Cray's Board of Directors. Mr. Turner previously served as the chief financial officer of Coinstar, Inc. (now known as Outerwall Inc.), and held financial leadership positions at RealNetworks, Inc., BSquare Corporation, and Radisys Corporation. He currently also sits on the boards of directors for a number of companies, including MicroVision, Inc., a publicly-traded technology company.
• In February, Cray appointed Fred Kohout to the position of chief marketing officer. Mr. Kohout brings more than 25 years of marketing experience, including with EMC and Sun Microsystems. He will be responsible for leading Cray's global marketing efforts, and will oversee the development and execution of the Company's strategic marketing programs, business development initiatives and partnerships.
• In March, NBC News highlighted the use of Cray supercomputers to run predictive weather models at the U.S. National Weather Service and the European Centre for Medium-Range Weather Forecasts.

About Cray Inc.

Global supercomputing leader Cray Inc. (NASDAQ: CRAY) provides innovative systems and solutions enabling scientists and engineers in industry, academia and government to meet existing and future simulation and analytics challenges. Leveraging more than 40 years of experience in developing and servicing the world's most advanced supercomputers, Cray offers a comprehensive portfolio of supercomputers and big data storage and analytics solutions delivering unrivaled performance, efficiency and scalability. Cray's Adaptive Supercomputing vision is focused on delivering innovative next-generation products that integrate diverse processing technologies into a unified architecture, allowing customers to meet the market's continued demand for realized performance. Go to www.cray.com for more information.

Source: Cray