Silicon Graphics International (SGI) said profit and sales for the latest fiscal quarter probably fell short of analysts’ projections because the partial government shutdown is “freezing” some projects.

Revenue for its first quarter of fiscal 2014 was about $147 million. This is below their guidance range of $160 million to $170 million for revenue. The revenue shortfall was primarily due to the impending government shutdown at quarter-end, which led to the freezing of funds for a Federal project; and to delayed acceptance of a non-Federal project.

Total revenue for the first quarter fiscal year 2013 was $193 million and $179 million in the first quarter of 2012.

Cash as of the end of the fiscal first quarter was $165 million, which compares with $179 million for the prior quarter and $96 million (net of debt outstanding) as of the same period a year ago. The change in cash for the quarter was primarily related to changes in working capital.

SGI shares declined as much as 10 percent in trading today.

The 10-day old partial closing of the federal government, caused by a budget impasse and fight over President Barack Obama’s health-care reform law between Democrats and Republicans in Congress, is making it “virtually impossible” to deal with government clients, according to SGI Chief Executive Officer Jorge Titinger.

"Although we began Q1 expecting ongoing budget uncertainty in the Federal space similar to what we experienced through the fiscal cliff and the sequester, we could not have anticipated the unprecedented halt in all transaction activity that occurred in late September due to the looming government shutdown.” The shutdown “adds significant risk to our near-term revenue outlook and impairs our visibility as to the timing of the expected restart of Federal projects,” explained Titinger.