SGI Somnigroup International Inc

Continued Progress in Negotiations for Additional Debt Financing MOUNTAIN VIEW, Calif., Sept. 8 /PRNewswire-FirstCall/ -- Silicon Graphics (NYSE:SGI) today announced that the filing of its Form 10-K for the fiscal year ended June 24, 2005 has been delayed because additional time is required to update the filing to reflect its current situation and to permit SGI to finalize its audited financial statements and related internal control assessment. The Company does not expect that the financial statements contained in the filing will differ in any material respect from the financial information previously announced. Ernst & Young has advised the Company, however, that its audit report is likely to contain an explanatory paragraph with respect to the Company's ability to continue as a going concern. SGI also announced it is continuing to progress in negotiations with certain lenders for a new asset-backed credit facility that would provide significant additional borrowing availability and expects to receive a commitment letter shortly. The new facility would replace SGI's existing facility, which currently is used to support letters of credit principally relating to real property leases. SGI said that if it received the new financing, it would use the additional credit to provide liquidity to support operations. The financing would be subject to the completion of definitive agreements and other conditions. SGI has received a waiver of compliance with the EBITDA covenant for the quarter ended June 24, 2005 under its current credit facility. "We are making significant progress in implementing our previously announced plans to reduce expenses and improve our liquidity," said Jeffrey Zellmer, senior vice president and chief financial officer. SGI announced last week it had approved a restructuring plan and begun to implement the restructuring actions with notifications to affected employees in North America on September 1, 2005. SGI has filed a Form 12b-25 with the Securities and Exchange Commission with respect to the delay in the 10-K filing. Under SEC rules, the 10-K filing will be deemed current so long as it is filed by September 22. SILICON GRAPHICS | The Source of Innovation and Discovery(TM) SGI, also known as Silicon Graphics, Inc., is a leader in high-performance computing, visualization and storage. SGI's vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense or enabling the transition from analog to digital broadcasting, SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at http://www.sgi.com/. This news release contains forward-looking statements regarding SGI that are subject to risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from those described in such statements. The reader is cautioned not to rely unduly on these forward- looking statements, which are not a guarantee of future or current performance. Such risks and uncertainties include risks associated with the timely development, production and acceptance of new products and services; increased competition; dependence on third party partners and suppliers; the failure to achieve expected product mix and revenue levels; failure to manage costs and generate improved operating results and cash flows; failure to maintain adequate cash resources for the operation of the business; failure to retain existing financing or to obtain new financing; failure to enter into a definitive agreement relating to the new asset-backed credit facility; liquidity uncertainties; risks related to legal proceedings or other actions that might be commenced by the company's creditors or other parties; and other risks detailed from time to time in the company's most recent SEC reports, including its reports on Form 10-K and Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether changes occur as a result of new information, future events or otherwise. NOTE: Silicon Graphics, SGI, the SGI cube and the SGI logo are registered trademarks and The Source of Innovation and Discovery is a trademark of Silicon Graphics, Inc., in the United States and/or other countries worldwide. All other trademarks mentioned herein are the property of their respective owners. CONTACT: PR: Caroline Japic, +1-650-933-7210, or , or SGI PR hotline, +1-650-933-7777, or Investor Relations: Beth Howe, , +1-650-933-7210 DATASOURCE: SGI CONTACT: PR: Caroline Japic, +1-650-933-7210, or , or SGI PR hotline, +1-650-933-7777, or Investor Relations: Beth Howe, , +1-650-933-7210 Web site: http://www.sgi.com/

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