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SGI reorganizes, CFO resigns

Silicon Graphics announces a restructuring of its operations and the resignation of CFO Stanley J. Meresman.

Silicon Graphics (SGI) today announced a restructuring of its operations and the resignation of its chief financial officer.

Stanley J. Meresman, CFO, has resigned to pursue other interests. William Kelly, senior vice president of corporate operations, will become the acting CFO.

Edward McCracken, chairman and chief executive, said the company expects to find a replacement for Meresman in the next few months.

"As we set up our organization for the future, I think it's time for our people to really evaluate their objectives and make sure they fit with the objectives with the company. Stan has decided leave the company at this time to pursue other interests," McCracken said.

Also resigning is Michael Ramsay, senior vice president of the Silicon Desktop Group. He too is leaving for personal reasons, according to the company.

Under the restructuring, SGI has formed three new operating units in an effort to realign the company to focus on core businesses and growth markets.

The computer systems unit will serve as an umbrella over the enterprise, desktop, graphics, and Cray technologies groups, as well as the manufacturing group. Although these four groups existed previously, the focus of each has changed. Robert Ewald, former president of the Cray Research subsidiary, will oversee the new unit and report to McCracken.

"Our business has changed dramatically over the last few years. Most people view us primarily a graphics workstation company. But today, only about a third of our business is graphic workstations," McCracken said.

A third of the business is SGI's supercomputer business, following the company's acquisition last year of Cray Research. The remaining third is a new market: network servers.

The new network server market is focused on Internet service providers, telecommunciations, and intranets.

SGI is also formed the corporate operations unit that will oversee such areas as human resources, legal, and facilities. The department heads for these various areas will report directly to Kelly, who will in turn report to McCracken.

The customer and professional services unit will handle areas such as support operations and SGI's revenue-producing services. That unit will be overseen by Ken Coleman, former head of administration, who will report to McCracken.

"I'm setting up things to be more efficient for me and give me more time to work with our customers and partners and work on the strategy of Silicon Graphics as an entire company," said McCracken, in addressing the need to form the other two units. "It's an efficiency thing for me and Silicon Graphics."

SGI last month reported third-quarter profits of $11 million, a shift after posting three consecutive quarters of losses. The profits, however, were below its year-ago level of $53 million.

And the company posted revenues of $909 million, marking its third consecutive quarter of growth and an improvement over the year-ago figure.

Despite these changes, the company's stock has been lagging, in part due to higher earnings expectations from the third quarter. The company attributed its lower-than-expected results to a strong dollar and desktop product transition.