The company recorded a $21m loss in its first quarter, up from a loss of $3.8m on revenue 10.7% down at $37.6m. CEO Jim Rottsolk said revenue did not include several systems that were shipped but are awaiting customer acceptances.
With the shares down 25.96% at $1.54, valuing the whole company at $135m, the market was not comforted by Rottsolk’s statement that the backlog of $127m at the end of 2004 was 53% up on the figure a year earlier.
Cray plans to vigorously appeal the decision to delist the company for not including its auditor’s opinion on management’s assessment of internal control over financial reporting, required by the Sarbanes-Oxley Act.
The management’s own interim assessment in a recent SEC filing is that it expects to conclude that its internal control over financial reporting is ineffective, which could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price and access to capital.
