SGI Announces Earnings, New CEO

Dennis McKenna, formerly of SCP Global, takes the helm at a challenging time for SGI.

Silicon Graphics, the supercomputing vendor that has struggled in recent months, has a new leader.

Dennis McKenna, who came to SGI from semiconductor equipment supplier SCP Global Technologies, was appointed by the companys Board of Directors as chairman, president and CEO.

McKenna replaces Robert Bishop, a 20-year SGI veteran who has been CEO for the past six years.

Bishop will stay on as vice chairman of the board of directors.

Also on Tuesday, SGI announced that it lost $30 million on $144 million in revenue in the second quarter in its 2005 fiscal year, which ended Dec. 30. The company lost $32 million in the first quarter.

McKenna takes over a company that has been a key player in the high-performance computing market, but which has seen its fortunes fall in recent years as competition in the space has increased. The company was delisted from the New York Stock Exchange in November when its stock stalled below $1.

"To me, the name SGI is synonymous with high-performance computing," McKenna said in a statement.

"I am confident my global background in business development and operational execution will add to the strength of our products and solutions. We have challenges that we are addressing. My approach will be to continue to do what we do well, do it more efficiently and productively, and to determine how what we do well can extend our ability to grow revenue and profits."

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"Dennis McKenna is a proven leader, with an established track record of driving positive results in difficult business environments," James McDivitt, lead director for SGI, said in a statement. "He is well-balanced in strategy, business development and operational execution—a combination that we believe will bring improved results to SGI and its stakeholders."

SGI is pushing forward with its Altix line of computers, based on Intels 64-bit Itanium 2 processors. In November, SGI introduced a redesign of the Altix family—the Altix 4000—based on a bladed form factor, which officials said will give customers greater flexibility and scalability. They said at the time that the company had $68 million in commitments from U.S. companies to buy the new system.

The new form factor can fit up to 40 blades in a 2-foot-by-3-foot rack and hold up to 160 Itanium 2 chips for almost 1 teraflop of performance, and uses SGIs shared memory NUMAFlex architecture for greater scalability. It also runs standard Linux operating systems from Red Hat and Novells SUSE unit, rather than SGIs own Linux variant.

In the second quarter, SGI also announced a number of new customers, including the California Institute for Telecommunications and Information Technology, Goodrichs Surveillance and Reconnaissance Systems and the Hungarian Meteorological Service.

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