SGI Somnigroup International Inc

MOUNTAIN VIEW, Calif., Oct. 25 /PRNewswire-FirstCall/ -- Silicon Graphics (NYSE:SGI) today announced completion of a new two-year asset-backed credit facility with Wells Fargo Foothill, part of Wells Fargo & Company (NYSE:WFC), and Ableco Finance LLC. The new facility provides for increased credit of up to $100 million, consisting of a $50 million revolving line of credit and a $50 million term loan. The previous facility provided availability of up to $50 million, but was subject to a minimum cash collateral requirement of $20 million. "Securing this increased credit facility is an important step in our turnaround and, to us, represents a vote of confidence that we are on the right path," said Jeff Zellmer, SGI's chief financial officer. "Unlike the prior credit facility, which we used solely for letters of credit to support lease obligations, the new facility also provides for cash borrowings that will significantly improve our liquidity." The borrowing base under the new credit facility will be determined weekly based on the value of working capital items, real estate and intellectual property. The new facility does not require the permanent deposit of cash collateral, which is a significant change from the prior credit facility. The new facility is secured by substantially all of the assets of SGI and its domestic subsidiaries and includes customary terms and conditions, including covenants for minimum levels of EBITDA (earnings before interest, taxes, depreciation and amortization), minimum levels of cash and cash equivalents, and limits on capital expenditures. Forward-Looking Statements This news release contains forward-looking statements relating to future events or expected financial performance that involve risks and uncertainties. The company's future results could differ materially from the expectations discussed herein. Factors that might cause such a difference 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 compliance with debt covenants; and failure to maintain adequate cash resources for the operation of the business. These and other risks are detailed from time to time in SGI's periodic reports that are filed with the Securities and Exchange Commission, including SGI's annual report on Form 10-K for the year ended June 24, 2005. Silicon Graphics is under no obligation to publicly update or revise any forward-looking statements, whether changes occur as a result of new information, future events or otherwise. 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/. 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. Press Contact: Caroline Japic, , 650.933.7210, SGI PR Hotline: 650.933.7777; Investor Contact: Beth Howe, , 650.933.8279 DATASOURCE: Silicon Graphics, Inc. CONTACT: Press, Caroline Japic, +1-650-933-7210, or , or SGI PR Hotline, +1-650-933-7777, or Investors, Beth Howe, +1-650-933-8279, or , both of SGI /First Call Analyst: Web site: http://www.sgi.com/

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