SEATTLE, WA, Feb 27, 2012 (MARKETWIRE via COMTEX) --Global supercomputer leader Cray Inc. (NASDAQ: CRAY) today announced financial results for the year and fourth quarter ended December 31, 2011. For 2011, Cray reported revenue of $236.0 million and net income of $14.3 million, or $0.40 per share. Cray reported an operating profit for the year of $1.2 million. Net income results benefited from a partial release of $14.7 million of the valuation allowance held against Cray's deferred tax assets. This release was determined after considering both past financial results and future expectations.
Revenue for the fourth quarter of 2011 was $91.6 million compared to $219.4 million in the prior year period. The Company reported net income for the fourth quarter of $31.0 million or $0.85 per share compared to $52.1 million or $1.46 per share in the fourth quarter of 2010.
Overall gross profit margin for 2011 was 40 percent compared to 34 percent in 2010. Product margin for 2011 was 35 percent, consistent with 2010 results; service margin for 2011 was 49 percent compared to 32 percent for 2010. For the fourth quarter of 2011, overall gross profit margin was 38 percent compared to 37 percent in the fourth quarter of 2010.
Operating expenses for 2011 were $93.2 million compared to $92.5 million in 2010. Included in the 2011 results was $1.8 million for restructuring, $8.6 million for depreciation and amortization and $3.6 million related to stock compensation.
Operating expenses for the fourth quarter of 2011 were $17.9 million compared to $27.4 million in the prior year period. Fourth quarter 2011 operating expenses benefited from a $12 million R&D co-funding credit related to the Company's DARPA contract. Included in the fourth quarter 2011 results were non-cash items of $2.2 million for depreciation and amortization and $0.9 million related to stock compensation.
As of December 31, 2011, cash balances totaled $54.2 million and accounts receivable totaled $72.4 million.
"Led by strong margins, we were able to deliver operating profits in 2011 despite delays related to a key component that caused a large acceptance to slip out beyond year-end, but which we have since completed," said Peter Ungaro, president and CEO of Cray. "We continue to see strength in our high-end supercomputer business with a number of big wins over the past few months, both domestically and abroad. We are making good progress on our three growth initiatives with new offerings in each planned for 2012. These initiatives leverage our core strengths in supercomputing while dramatically expanding our addressable market and growth potential. I expect 2012 to be an outstanding year for the company, breaking the $400 million revenue threshold and refreshing our entire product line top to bottom."
While a wide range of results remains possible for 2012, the Company expects 2012 revenue to be in the range of $400-$420 million. Revenue for the first quarter of 2012 is expected to be about $100 million with the balance of the revenue for the year heavily weighted to the fourth quarter. Overall gross margins for 2012 are anticipated to be in the 35 percent range. Total operating expenses for the year are expected to increase to about $120 million, driven primarily by higher investments in our growth initiatives and incentive based compensation. Based on this outlook, we expect to be solidly profitable for 2012.
As a result of the partial release of the deferred tax valuation allowance in the fourth quarter of 2011, while volatile and dependent on a number of variables, the Company currently projects its 2012 effective income tax rate to be about 40 percent. Due to the Company's substantial net operating loss carryforwards the quarterly and annual income tax provision is expected to be largely non-cash.