Global supercomputer leader Cray Inc. (Nasdaq:CRAY) today announced
financial results for the year and fourth quarter ended
December 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.
For 2016, Cray reported total revenue of $629.8 million, which
compares with $724.7 million for 2015. Net income for 2016 was
$10.6 million, or $0.26 per diluted share, compared to $27.5
million, or $0.68 per diluted share for 2015. Non-GAAP net
income, which adjusts for selected unusual and non-cash items, was
$19.9 million, or $0.49 per diluted share for 2016, compared to
$53.0 million, or $1.30 per diluted share for 2015.
Revenue for the fourth quarter of 2016 was $346.6 million, which
compares with $267.5 million in the fourth quarter of 2015.
Net income for the fourth quarter of 2016 was $51.8 million, or
$1.27 per diluted share, compared to net income of $20.3 million,
or $0.50 per diluted share in the fourth quarter of 2015.
Non-GAAP net income was $56.3 million, or $1.38 per diluted share
for the fourth quarter of 2016, compared to non-GAAP net income of
$32.2 million, or $0.79 per diluted share for the same period of
2015.
Overall gross profit margin on a GAAP and non-GAAP basis for
2016 was 35%. For 2015, GAAP and non-GAAP gross profit margin
was 31% and 32%, respectively.
Operating expenses for 2016 were $211.1 million, compared to
$184.7 million for 2015. Non-GAAP operating expenses for 2016
were $199.7 million, compared to $173.3 million for 2015.
As of December 31, 2016, cash and restricted cash totaled
$225 million. Working capital at the end of the fourth quarter was
$392 million, compared to $415 million at December 31,
2015.
“While 2016 wasn’t nearly as strong as we originally targeted,
we finished the year well, with the largest revenue quarter in our
history and solid cash balances, as well as delivering
profitability for the year,” said Peter Ungaro, president and CEO
of Cray. “We completed numerous large system installations around
the world in the fourth quarter, providing our customers with the
most scalable, highest performance supercomputing, storage and
analytics solutions in the market. We continue to lead the
industry at the high-end and, despite an ongoing downturn in the
market, we’re in excellent position to continue to deliver for our
customers and drive long-term growth.”
OutlookDue to current market conditions, the
Company has limited visibility into 2017. While a wide range
of results remains possible, the Company continues to believe it
will be difficult to grow revenue compared to 2016. Revenue
in the first quarter of 2017 is expected to be approximately $55
million. GAAP and non-GAAP gross margins for the year are
expected to be in the low-mid 30% range. Non-GAAP operating
expenses for 2017 are expected to be roughly flat with 2016
levels. For 2017, GAAP operating expenses are anticipated to
be about $12 million higher than non-GAAP operating expenses, and
GAAP gross profit is expected to be about $1 million lower than
non-GAAP gross profit.
Actual results for any future periods are subject to large
fluctuations given the nature of Cray’s business.
Recent Highlights
- In November, Cray launched its latest generation supercomputer,
the Cray XC50, the company’s fastest supercomputer ever with a peak
performance of one petaflop in a single cabinet. Among the
many enhancements of the XC50, this new system adds support for the
Nvidia Tesla P100 GPU accelerator as well as for next-generation
Intel Xeon and Intel Xeon Phi processors.
- In January, Cray appointed Stathis Papaefstathiou to the
position of senior vice president of R&D. With more than
30 years of high tech experience, Papaefstathiou has held
senior-level positions at Aerohive Networks, F5 Networks, and
Microsoft.
- In December, Cray announced the results of a deep learning
collaboration between Cray, Microsoft, and the Swiss National
Supercomputing Centre (CSCS) that expands the horizons of running
deep learning algorithms at scale using the power of Cray
supercomputers. Cray has validated and made available several deep
learning toolkits on Cray XC and Cray CS-Storm systems to simplify
the transition to running deep learning workloads at scale.
- In November, Cray highlighted recent momentum for the Urika-GX
agile analytics platform and previewed ongoing software updates to
the system. New customers include a manufacturing
collaborative and a customer engagement marketing solution
provider, both looking to harness the Urika-GX to deliver enhanced
value to their customers.
- In November, Cray announced it had joined iEnergy the rapidly
growing exploration and production industry community brokered by
Halliburton Landmark. iEnergy community members can now choose to
run Landmark SeisSpace Seismic Processing Software on a Cray CS400
cluster supercomputer.
Conference Call InformationCray will host a
conference call today, Wednesday, February 8, 2017 at 1:30
p.m. PST (4:30 p.m. EST) to discuss its fourth quarter and year
ended December 31, 2016 financial results. To access the
call, please dial into the conference at least 10 minutes prior to
the beginning of the call at (855) 894-4205. International callers
should dial (765) 889-6838 and use the conference ID
#64279479. To listen to the audio webcast, go to the
Investors section of the Cray website at
www.cray.com/company/investors.
If you are unable to attend the live conference call, an audio
webcast replay will be available in the Investors section of the
Cray website for 180 days. A telephonic replay of the call
will also be available by dialing (855) 859-2056, international
callers dial (404) 537-3406, and entering the conference ID
#64279479. The conference call replay will be available for
72 hours, beginning at 4:45 p.m. PST on Wednesday, February 8,
2017.
Use of Non-GAAP Financial MeasuresThis press
release contains “non-GAAP financial measures” under the rules of
the U.S. Securities and Exchange Commission. A reconciliation
of U.S. generally accepted accounting principles, or GAAP, to
non-GAAP results is included in the financial tables included in
this press release. Management believes that the non-GAAP
financial measures that we have set forth provide additional
insight for analysts and investors and facilitate an evaluation of
Cray’s financial and operational performance that is consistent
with the manner in which management evaluates Cray’s financial
performance. However, these non-GAAP financial measures have
limitations as an analytical tool, as they exclude the financial
impact of transactions necessary or advisable for the conduct of
Cray’s business, such as the granting of equity compensation
awards, and are not intended to be an alternative to financial
measures prepared in accordance with GAAP. Hence, to
compensate for these limitations, management does not review these
non-GAAP financial metrics in isolation from its GAAP results, nor
should investors. Non-GAAP financial measures are not based
on a comprehensive set of accounting rules or principles.
This non-GAAP information supplements, and is not intended to
represent a measure of performance in accordance with, or
disclosures required by GAAP. These measures are adjusted as
described in the reconciliation of GAAP to non-GAAP numbers at the
end of this release, but these adjustments should not be construed
as an inference that all of these adjustments or costs are unusual,
infrequent or non-recurring. Non-GAAP financial measures
should be considered in addition to, and not as a substitute for or
superior to, financial measures determined in accordance with
GAAP. Investors are advised to carefully review and consider
this non-GAAP information as well as the GAAP financial results
that are disclosed in Cray’s SEC filings.
Additionally, we have not quantitatively reconciled the non-GAAP
guidance measures disclosed under “Outlook” to their corresponding
GAAP measures because we do not provide specific guidance for the
various reconciling items such as stock-based compensation,
adjustments to the provision for income taxes, amortization of
intangibles, costs related to acquisitions, purchase accounting
adjustments, and gain on significant asset sales, as certain items
that impact these measures have not occurred, are out of our
control or cannot be reasonably predicted. Accordingly,
reconciliations to the non-GAAP guidance measures are not available
without unreasonable effort. Please note that the unavailable
reconciling items could significantly impact our financial
results.
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.
Safe Harbor StatementThis press release
contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933, including, but not limited to, statements
related to Cray’s financial guidance and expected operating results
and its product development, sales and delivery plans. These
statements involve current expectations, forecasts of future events
and other statements that are not historical facts. Inaccurate
assumptions and estimates as well as known and unknown risks and
uncertainties can affect the accuracy of forward-looking statements
and cause actual results to differ materially from those
anticipated by these forward-looking statements. Factors that could
affect actual future events or results include, but are not limited
to, the risk that Cray does not achieve the operational or
financial results that it expects, the risk that Cray will not be
able to secure orders for Cray products to be accepted in 2017 when
or at the levels expected, the risk that the market for high-end
supercomputing products does not recover from the current downturn
early enough in 2017 or at all, the risk that government funding
for research and development projects is less than expected, the
risk that new third-party processors and other components are not
available with the performance expected or when expected or at the
cost expected, the risk that the systems ordered by customers are
not delivered when expected, do not perform as expected once
delivered or have technical issues that cannot be corrected within
the time for planned acceptances, the risk that the acceptance
process for delivered systems is not completed, or customer
acceptances are not received, when expected or at all, the risk
that Cray is not able to successfully sell products and services in
the big data and commercial markets as expected or at all, the risk
that the expense to address Cray systems at customer sites that
have issues with third party components or with Cray components, is
material, the risk that Cray is not able to successfully complete
its planned product development efforts in a timely fashion or at
all, the risk that Cray is not able to achieve anticipated gross
margin or expense levels and such other risks as identified in
Cray’s quarterly report on Form 10-Q for the period ended September
30, 2016, and from time to time in other reports filed by Cray with
the U.S. Securities and Exchange Commission (“SEC”), including
Cray’s Annual Report on Form 10-K for the year ended December 31,
2016 to be filed with the SEC. You should not rely unduly on these
forward-looking statements, which apply only as of the date of this
release. Cray undertakes no duty to publicly announce or report
revisions to these statements as new information becomes available
that may change Cray’s expectations.
CRAY, the stylized CRAY mark and Urika are registered trademarks
of Cray Inc. in the United States and other countries, and the XC
and CS families of supercomputers and CS-Storm are trademarks of
Cray Inc.
CRAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited and in thousands, except per
share data)
|
|
Three Months Ended December
31, |
|
Twelve Months Ended December
31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenue: |
|
|
|
|
|
|
|
|
Product |
|
$ |
311,408 |
|
|
$ |
232,924 |
|
|
$ |
499,432 |
|
|
$ |
601,294 |
|
Service |
|
35,166 |
|
|
34,547 |
|
|
130,377 |
|
|
123,395 |
|
Total
revenue |
|
346,574 |
|
|
267,471 |
|
|
629,809 |
|
|
724,689 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
Cost of
product revenue |
|
206,827 |
|
|
160,034 |
|
|
332,016 |
|
|
426,821 |
|
Cost of
service revenue |
|
19,256 |
|
|
21,257 |
|
|
77,578 |
|
|
72,185 |
|
Total
cost of revenue |
|
226,083 |
|
|
181,291 |
|
|
409,594 |
|
|
499,006 |
|
Gross
profit |
|
120,491 |
|
|
86,180 |
|
|
220,215 |
|
|
225,683 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research
and development, net |
|
29,807 |
|
|
29,281 |
|
|
112,130 |
|
|
96,563 |
|
Sales and
marketing |
|
18,502 |
|
|
18,054 |
|
|
64,893 |
|
|
60,150 |
|
General
and administrative |
|
9,728 |
|
|
8,662 |
|
|
34,053 |
|
|
27,966 |
|
Total
operating expenses |
|
58,037 |
|
|
55,997 |
|
|
211,076 |
|
|
184,679 |
|
Income
from operations |
|
62,454 |
|
|
30,183 |
|
|
9,139 |
|
|
41,004 |
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
(196 |
) |
|
31 |
|
|
(1,365 |
) |
|
365 |
|
Interest income,
net |
|
493 |
|
|
294 |
|
|
2,147 |
|
|
1,408 |
|
Income
before income taxes |
|
62,751 |
|
|
30,508 |
|
|
9,921 |
|
|
42,777 |
|
Income tax (expense)
benefit |
|
(10,976 |
) |
|
(10,213 |
) |
|
694 |
|
|
(15,240 |
) |
Net
income |
|
$ |
51,775 |
|
|
$ |
20,295 |
|
|
$ |
10,615 |
|
|
$ |
27,537 |
|
|
|
|
|
|
|
|
|
|
Basic net
income per common share |
|
$ |
1.30 |
|
|
$ |
0.51 |
|
|
$ |
0.27 |
|
|
$ |
0.70 |
|
Diluted
net income per common share |
|
$ |
1.27 |
|
|
$ |
0.50 |
|
|
$ |
0.26 |
|
|
$ |
0.68 |
|
Basic
weighted average shares outstanding |
|
39,974 |
|
|
39,532 |
|
|
39,833 |
|
|
39,257 |
|
Diluted
weighted average shares outstanding |
|
40,816 |
|
|
40,993 |
|
|
41,012 |
|
|
40,691 |
|
CRAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited and in thousands, except share
amounts)
|
December 31, 2016 |
|
December 31, 2015 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
222,962 |
|
|
$ |
266,660 |
|
Restricted cash |
— |
|
|
1,651 |
|
Short-term investments |
— |
|
|
14,925 |
|
Accounts
and other receivables, net |
197,941 |
|
|
124,719 |
|
Inventory |
88,254 |
|
|
113,655 |
|
Deferred
tax assets |
19,117 |
|
|
38,628 |
|
Prepaid
expenses and other current assets |
20,006 |
|
|
21,048 |
|
Total
current assets |
548,280 |
|
|
581,286 |
|
|
|
|
|
Long-term restricted
cash |
1,655 |
|
|
1,655 |
|
Long-term investment in
sales-type lease, net |
31,050 |
|
|
18,317 |
|
Property and equipment,
net |
30,620 |
|
|
31,079 |
|
Service spares,
net |
3,023 |
|
|
3,090 |
|
Goodwill |
14,182 |
|
|
14,182 |
|
Intangible assets other
than goodwill, net |
1,637 |
|
|
2,525 |
|
Deferred tax
assets |
66,496 |
|
|
26,016 |
|
Other non-current
assets |
17,629 |
|
|
16,025 |
|
TOTAL
ASSETS |
$ |
714,572 |
|
|
$ |
694,175 |
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
45,504 |
|
|
$ |
27,837 |
|
Accrued
payroll and related expenses |
17,199 |
|
|
27,452 |
|
Other
accrued liabilities |
10,303 |
|
|
24,079 |
|
Deferred
revenue |
83,129 |
|
|
86,731 |
|
Total
current liabilities |
156,135 |
|
|
166,099 |
|
|
|
|
|
Long-term deferred
revenue |
27,258 |
|
|
33,306 |
|
Other non-current
liabilities |
5,703 |
|
|
2,260 |
|
TOTAL
LIABILITIES |
189,096 |
|
|
201,665 |
|
|
|
|
|
Shareholders’
equity: |
|
|
|
Preferred
stock — Authorized and undesignated, 5,000,000 shares; no shares
issued or outstanding |
— |
|
|
— |
|
Common
stock and additional paid-in capital, par value $.01 per share —
Authorized, |
|
|
|
|
|
75,000,000 shares; issued and outstanding 40,757,458 and
40,693,707 shares, respectively |
622,604 |
|
|
610,279 |
|
Accumulated other comprehensive income |
2,782 |
|
|
7,642 |
|
Accumulated deficit |
(99,910 |
) |
|
(125,411 |
) |
TOTAL
SHAREHOLDERS’ EQUITY |
525,476 |
|
|
492,510 |
|
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
714,572 |
|
|
$ |
694,175 |
|
CRAY INC. AND SUBSIDIARIES
Reconciliation of Selected U.S. GAAP
Measures to non-GAAP Measures(Unaudited; in
millions, except EPS)
|
|
Three Months Ended December 31,
2016 |
|
|
Net Income |
|
Diluted EPS |
|
Operating Income |
|
Gross Profit |
|
Operating Expenses |
GAAP |
|
$ |
51.8 |
|
|
$ |
1.27 |
|
|
$ |
62.5 |
|
|
$ |
120.5 |
|
|
$ |
58.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation |
(1 |
) |
2.8 |
|
|
|
|
2.8 |
|
|
0.1 |
|
|
2.7 |
|
Amortization of
acquired and other intangibles |
(2 |
) |
0.2 |
|
|
|
|
0.2 |
|
|
|
|
0.2 |
|
Items impacting tax
provision |
(3 |
) |
1.5 |
|
|
|
|
|
|
|
|
|
Total reconciling
items |
|
4.5 |
|
|
0.11 |
|
|
3.0 |
|
|
0.1 |
|
|
2.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
56.3 |
|
|
$ |
1.38 |
|
|
$ |
65.5 |
|
|
$ |
120.6 |
|
|
$ |
55.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
2015 |
|
|
Net Income |
|
Diluted EPS |
|
Operating Income |
|
Gross Profit |
|
Operating Expenses |
GAAP |
|
$ |
20.3 |
|
|
$ |
0.50 |
|
|
$ |
30.2 |
|
|
$ |
86.2 |
|
|
$ |
56.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation |
(1 |
) |
2.8 |
|
|
|
|
2.8 |
|
|
0.2 |
|
|
2.6 |
|
Purchase accounting
adjustments |
(2 |
) |
0.1 |
|
|
|
|
0.1 |
|
|
0.1 |
|
|
|
Amortization of
acquired and other intangibles |
(2 |
) |
0.5 |
|
|
|
|
0.5 |
|
|
0.3 |
|
|
0.2 |
|
Items impacting tax
provision |
(3 |
) |
8.5 |
|
|
|
|
|
|
|
|
|
Total reconciling
items |
|
11.9 |
|
|
0.29 |
|
|
3.4 |
|
|
0.6 |
|
|
2.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
32.2 |
|
|
$ |
0.79 |
|
|
$ |
33.6 |
|
|
$ |
86.8 |
|
|
$ |
53.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Notes |
|
|
|
|
|
|
|
|
|
|
(1)
Adjustments to exclude non-cash expenses related to share-based
compensation |
|
|
(2)
Adjustments to exclude amortization of acquired intangible and
other intangible assets and other acquisition-related charges |
|
|
(3)
Adjustments associated with the tax impact on reconciling items,
benefits related to Cray’s net operating |
|
|
loss
carryforwards and changes in Cray’s valuation allowance held
against deferred tax assets |
|
|
CRAY INC. AND SUBSIDIARIES
Reconciliation of Selected U.S. GAAP
Measures to non-GAAP Measures(Unaudited; in
millions, except EPS)
|
|
Year Ended December 31, 2016 |
|
|
Net Income |
|
Diluted EPS |
|
Operating Income |
|
Gross Profit |
|
Operating Expenses |
GAAP |
|
$ |
10.6 |
|
|
$ |
0.26 |
|
|
$ |
9.1 |
|
|
$ |
220.2 |
|
|
$ |
211.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation |
(1 |
) |
11.2 |
|
|
|
|
11.2 |
|
|
0.5 |
|
|
10.7 |
|
Purchase accounting
adjustments |
(2 |
) |
0.1 |
|
|
|
|
0.1 |
|
|
0.1 |
|
|
|
Amortization of
acquired and other intangibles |
(2 |
) |
0.7 |
|
|
|
|
0.7 |
|
|
|
|
0.7 |
|
Items impacting tax
provision |
(3 |
) |
(2.7 |
) |
|
|
|
|
|
|
|
|
Total reconciling
items |
|
9.3 |
|
|
0.23 |
|
|
12.0 |
|
|
0.6 |
|
|
11.4 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
19.9 |
|
|
$ |
0.49 |
|
|
$ |
21.1 |
|
|
$ |
220.8 |
|
|
$ |
199.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015 |
|
|
Net Income |
|
Diluted EPS |
|
Operating Income |
|
Gross Profit |
|
Operating Expenses |
GAAP |
|
$ |
27.5 |
|
|
$ |
0.68 |
|
|
$ |
41.0 |
|
|
$ |
225.7 |
|
|
$ |
184.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation |
(1 |
) |
11.4 |
|
|
|
|
11.4 |
|
|
0.6 |
|
|
10.8 |
|
Purchase accounting
adjustments |
(2 |
) |
0.5 |
|
|
|
|
0.5 |
|
|
0.5 |
|
|
|
Amortization of
acquired and other intangibles |
(2 |
) |
2.4 |
|
|
|
|
2.4 |
|
|
1.8 |
|
|
0.6 |
|
Items impacting tax
provision |
(3 |
) |
11.2 |
|
|
|
|
|
|
|
|
|
Total reconciling
items |
|
25.5 |
|
|
0.62 |
|
|
14.3 |
|
|
2.9 |
|
|
11.4 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
53.0 |
|
|
$ |
1.30 |
|
|
$ |
55.3 |
|
|
$ |
228.6 |
|
|
$ |
173.3 |
|
|
|
|
|
|
|
|
|
|
|
|
Notes |
|
|
|
|
|
|
|
|
|
|
(1)
Adjustments to exclude non-cash expenses related to share-based
compensation |
|
|
(2)
Adjustments to exclude amortization of acquired intangible and
other intangible assets and other acquisition-related charges |
|
|
(3)
Adjustments associated with the tax impact on reconciling items,
benefits related to Cray’s net operating |
|
|
loss
carryforwards and changes in Cray’s valuation allowance held
against deferred tax assets |
|
|
CRAY INC. AND SUBSIDIARIES
Reconciliation of Selected U.S. GAAP
Measures to non-GAAP Measures(Unaudited; in
millions, except percentages)
|
|
Three Months Ended December 31,
2016 |
|
|
Product |
|
Service |
|
Total |
|
|
Gross Profit |
|
Gross Margin |
|
Gross Profit |
|
Gross Margin |
|
Gross Profit |
|
Gross Margin |
GAAP |
|
$ |
104.6 |
|
|
34 |
% |
|
$ |
15.9 |
|
|
45 |
% |
|
$ |
120.5 |
|
|
35 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation |
(1 |
) |
0.1 |
|
|
|
|
— |
|
|
|
|
0.1 |
|
|
|
Total reconciling
items |
|
0.1 |
|
|
— |
% |
|
— |
|
|
— |
% |
|
0.1 |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
104.7 |
|
|
34 |
% |
|
$ |
15.9 |
|
|
45 |
% |
|
$ |
120.6 |
|
|
35 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
2015 |
|
|
Product |
|
Service |
|
Total |
|
|
Gross Profit |
|
Gross Margin |
|
Gross Profit |
|
Gross Margin |
|
Gross Profit |
|
Gross Margin |
GAAP |
|
$ |
72.9 |
|
|
31 |
% |
|
$ |
13.3 |
|
|
38 |
% |
|
$ |
86.2 |
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation |
(1 |
) |
0.1 |
|
|
|
|
0.1 |
|
|
|
|
0.2 |
|
|
|
Purchase accounting
adjustments |
(2 |
) |
0.1 |
|
|
|
|
|
|
|
|
0.1 |
|
|
|
Amortization of
acquired and other intangibles |
(2 |
) |
0.3 |
|
|
|
|
|
|
|
|
0.3 |
|
|
|
Total reconciling
items |
|
0.5 |
|
|
1 |
% |
|
0.1 |
|
|
1 |
% |
|
0.6 |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
73.4 |
|
|
32 |
% |
|
$ |
13.4 |
|
|
39 |
% |
|
$ |
86.8 |
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes |
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Adjustments to exclude non-cash expenses related to share-based
compensation |
(2)
Adjustments to exclude amortization of acquired intangible and
other intangible assets and other acquisition-related charges |
CRAY INC. AND SUBSIDIARIES
Reconciliation of Selected U.S. GAAP
Measures to non-GAAP Measures(Unaudited; in
millions, except percentages)
|
|
Year Ended December 31, 2016 |
|
|
Product |
|
Service |
|
Total |
|
|
Gross Profit |
|
Gross Margin |
|
Gross Profit |
|
Gross Margin |
|
Gross Profit |
|
Gross Margin |
GAAP |
|
$ |
167.4 |
|
|
34 |
% |
|
$ |
52.8 |
|
|
40 |
% |
|
$ |
220.2 |
|
|
35 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation |
(1 |
) |
0.3 |
|
|
|
|
0.2 |
|
|
|
|
0.5 |
|
|
|
Purchase accounting
adjustments |
(2 |
) |
0.1 |
|
|
|
|
|
|
|
|
0.1 |
|
|
|
Total reconciling
items |
|
0.4 |
|
|
— |
% |
|
0.2 |
|
|
1 |
% |
|
0.6 |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
167.8 |
|
|
34 |
% |
|
$ |
53.0 |
|
|
41 |
% |
|
$ |
220.8 |
|
|
35 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015 |
|
|
Product |
|
Service |
|
Total |
|
|
Gross Profit |
|
Gross Margin |
|
Gross Profit |
|
Gross Margin |
|
Gross Profit |
|
Gross Margin |
GAAP |
|
$ |
174.5 |
|
|
29 |
% |
|
$ |
51.2 |
|
|
42 |
% |
|
$ |
225.7 |
|
|
31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation |
(1 |
) |
0.3 |
|
|
|
|
0.3 |
|
|
|
|
0.6 |
|
|
|
Purchase accounting
adjustments |
(2 |
) |
0.5 |
|
|
|
|
|
|
|
|
0.5 |
|
|
|
Amortization of
acquired and other intangibles |
(2 |
) |
1.8 |
|
|
|
|
|
|
|
|
1.8 |
|
|
|
Total reconciling
items |
|
2.6 |
|
|
— |
% |
|
0.3 |
|
|
— |
% |
|
2.9 |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
177.1 |
|
|
29 |
% |
|
$ |
51.5 |
|
|
42 |
% |
|
$ |
228.6 |
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes |
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Adjustments to exclude non-cash expenses related to share-based
compensation |
(2)
Adjustments to exclude amortization of acquired intangible and
other intangible assets and other acquisition-related charges |
CRAY INC. AND SUBSIDIARIES
Reconciliation of GAAP to non-GAAP Net
Income(Unaudited; in millions except per share
amounts and percentages)
|
|
Three Months Ended December
31, |
|
Twelve Months Ended December
31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
GAAP Net Income |
|
$ |
51.8 |
|
|
$ |
20.3 |
|
|
$ |
10.6 |
|
|
$ |
27.5 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments
impacting gross profit: |
|
|
|
|
|
|
|
|
Share-based
compensation |
(1 |
) |
0.1 |
|
|
0.2 |
|
|
0.5 |
|
|
0.6 |
|
Purchase
accounting adjustments |
(2 |
) |
— |
|
|
0.1 |
|
|
0.1 |
|
|
0.5 |
|
Amortization of
acquired and other intangibles |
(2 |
) |
— |
|
|
0.3 |
|
|
— |
|
|
1.8 |
|
Total adjustments
impacting gross profit |
|
0.1 |
|
|
0.6 |
|
|
0.6 |
|
|
2.9 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin
percentage |
|
35 |
% |
|
32 |
% |
|
35 |
% |
|
32 |
% |
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments
impacting operating expenses: |
|
|
|
|
|
|
|
|
Share-based
compensation |
(1 |
) |
2.7 |
|
|
2.6 |
|
|
10.7 |
|
|
10.8 |
|
Amortization of
acquired and other intangibles |
(2 |
) |
0.2 |
|
|
0.2 |
|
|
0.7 |
|
|
0.6 |
|
Total adjustments
impacting operating expenses |
|
2.9 |
|
|
2.8 |
|
|
11.4 |
|
|
11.4 |
|
|
|
|
|
|
|
|
|
|
Items impacting tax
provision |
(3 |
) |
1.5 |
|
|
8.5 |
|
|
(2.7 |
) |
|
11.2 |
|
Non-GAAP Net
Income |
|
$ |
56.3 |
|
|
$ |
32.2 |
|
|
$ |
19.9 |
|
|
$ |
53.0 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted Net
Income per common share |
|
$ |
1.38 |
|
|
$ |
0.79 |
|
|
$ |
0.49 |
|
|
$ |
1.30 |
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares |
|
40.8 |
|
|
41.0 |
|
|
41.0 |
|
|
40.7 |
|
|
|
|
|
|
|
|
|
|
Notes |
|
|
|
|
|
|
|
|
(1)
Adjustments to exclude non-cash expenses related to share-based
compensation |
|
|
|
|
(2)
Adjustments to exclude amortization of acquired intangible and
other intangible assets and other acquisition-related charges |
|
|
|
|
(3)
Adjustments associated with the tax impact on reconciling items,
benefits related to Cray’s net operating loss
carryforwards |
|
|
|
|
and
changes in Cray’s valuation allowance held against deferred tax
assets |
|
|
|
|
|
|
|
|
|
Cray Media:Nick Davis206/701-2123pr@cray.com
Cray Investors:Paul Hiemstra206/701-2044ir@cray.com
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