SGI Announces New CEO

SUNNYVALE, Calif. -- SGI (NASDAQ:SGIC) announced today that Robert H. "Bo" Ewald has been named Chief Executive Officer, effective immediately. Bo replaces Dennis McKenna who has served as SGI's Chief Executive Officer since January 31, 2006. In addition to his role as CEO, Bo will serve on SGI's Board of Directors.

"Bo Ewald brings the right skill set to lead SGI as we move from a focus on restructuring and stabilization to a focus on growth and profitability,"said Kevin Katari, SGI's Chairman of the Board and a Managing Member of Watershed Asset Management, LLC. "Bo's leadership skills and extensive experience in a range of high-performance computing and storage markets make him the right CEO to lead SGI to success, not only in the traditional technical and scientific HPC market, but also in new enterprise HPC segments where SGI's technologies have significant potential," added Mr. Katari.

"I'm very pleased to be returning to SGI," said Bo Ewald. "This is a great company steeped with accomplishment and history, highly innovative products, extremely highly skilled and dedicated employees, and a solid and loyal customer base. The SGI team has done a tremendous job over the past year, restructuring the company and refocusing its approach to the business. I'm excited about the opportunity to lead SGI and build on the momentum to grow the business by helping our customers be successful."

"The Board and employees of SGI are extremely grateful to Dennis McKenna for his decisive leadership and contributions over the past year, successfully restructuring and stabilizing the company," added Mr. Katari. "We also appreciate Dennis' support in assuring continuity and the smooth transition of the leadership of SGI."

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