UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): December 24, 2008
CRAY INC.
(Exact name of registrant
as specified in its charter)
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| Washington |
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0-26820 |
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93-0962605 |
| (State or other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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411 First Avenue South, Suite 600
Seattle, WA
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98104-2860 |
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(Zip Code) |
Registrant’s telephone number, including area code: (206)
701-2000
Registrant’s facsimile number, including area code: (206)
701-2500
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None
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| (Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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| Item 2.02 |
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Results of Operations and Financial Condition |
On
January 5, 2009, we issued a
press release announcing that in late 2008 the Oak
Ridge National Laboratory and the U.S. Department of Energy had accepted our Cray
XT5 petaflops system installed at Oak Ridge National Laboratory. This acceptance is
expected to contribute approximately $100 million of revenue to our fourth quarter
2008 and 2008 annual results. The
press release also reported the passage of our fourth milestone under our DARPA Phase III
contract in December 2008,
the goodwill impairment discussed under Item 2.06 below and the repurchase of our
3.0% Convertible Senior Subordinated Notes described under Item 8.01 below.
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| Item 2.06 |
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Material Impairments |
On
December 29, 2008, we determined that we are required to record a non—cash
charge of approximately $55.4 million for impairment of our goodwill, representing
all of our recorded goodwill as of
November 30, 2008. Our recorded goodwill
resulted from our acquisitions of the Cray Research business unit assets in 2000 and
of the OctigaBay Systems Corporation in 2004.
Under Statement of Financial Accounting Standards No. 142,
Goodwill and Other
Intangible Assets (“FAS No. 142), goodwill is not amortized but is tested for
impairment at least annually and more frequently if triggering events occur. We have
one operating segment and reporting unit. Based on the low market price for our
common stock in the fourth quarter of 2008, which resulted in a market
capitalization below the value of our net assets (approximate to shareholders’
equity), we determined that an indicator of potential impairment was present and,
following the two-step process prescribed in FAS No. 142, subsequently determined
that the total balance of goodwill as of
November 30, 2008, was impaired.
This non-cash charge will have no effect on our cash balances or cash flow from
operating activities, nor any effect on ongoing operations. The charge will be
recorded in our financial results for the fourth quarter of 2008 and will result in
a net loss for the quarter and year. We expect to release our 2008 results in the
first quarter of 2009.
On
December 24, 2008, we repurchased an additional $6,000,000 in principal amount of
our 3.0% Convertible Senior Subordinated Notes due 2024 (the
“Notes”) at a price
equal to 89% of par value plus accrued interest. The holders of the Notes have the
right to put the Notes to us on
December 1, 2009. After beginning the fourth quarter
of 2008 with $80,000,000 of Notes outstanding, we now have an aggregate principal
amount of $27,727,000 of Notes outstanding.
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| Item 9.01 |
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Financial Statements and Exhibits |
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99.1 |
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Press Release of Cray Inc., dated January 5, 2009, relating to
the following late 2008 actions: acceptance of the Cray XT5 petaflops system by
Oak Ridge National Laboratory and the U.S. Department of Energy, the passing of
our fourth milestone under our DARPA Phase III contract, our non-cash goodwill
impairment, and our repurchase of $6,000,000 principal amount of Notes. |
The information in
Exhibit 99.1 attached hereto is furnished and shall not be deemed
“filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”),
nor shall such information be deemed
incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
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