NEWS RELEASE
STB NEWS RELEASE
STB Systems, Inc. NEWS RELEASE
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FOR IMMEDIATE RELEASE
FOR MORE INFORMATION, CONTACT:
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STB Systems, Inc.
Bryan F. Keyes
Vice President of Administration
(972) 234-8750 (Ext. 2238)
STB SYSTEMS, INC. REPORTS RECORD RESULTS FOR THE
FIRST QUARTER OF FISCAL 1998
RICHARDSON, TEXAS (FEBRUARY 23, 1998)---STB SYSTEMS, INC. (NASDAQ-STBI), a
leading developer of multimedia accelerators and other multimedia subsystem
products, today announced revenues and earnings for the first quarter of the
1998 fiscal year.
As previously reported, the Company has declared a 3 for 2 stock split to
be effected in the form of a stock dividend which was distributed on February
20, 1998. The earnings per share amounts discussed below for both the current
quarter and the same quarter for the prior year reflect the effect of the stock
split.
For the quarter ended January 31, 1998, net income was $3.8 million or
$.33 diluted net income per share on net sales of $78.8 million compared to net
income of $2.3 million or $.21 diluted net income per share on net sales of
$48.1 million for the first quarter of fiscal 1997. There were 11.4 million
diluted weighted average shares outstanding for the fiscal 1998 first quarter,
compared to 10.7 million diluted weighted average shares for same quarter of
fiscal 1997.
For the quarter, OEM channel sales were particularly strong as shipments
to the Company's two largest customers exceeded customer forecasts. In high
demand was the Company's award-winning, nVidia based, Velocity 128 graphics
accelerator.
Quarterly unit volume increased 64.7% compared to the first quarter of
fiscal 1997, while revenues for the quarter were $78.8 million, up $30.6
million or 63.8% over the first quarter of the 1997 fiscal year. Revenues for
the quarter increased by $18.1 million or 29.8% compared to the immediately
preceding quarter.
The gross profit margin for the quarter was 20.6% compared to 22.1% posted
during the first quarter of fiscal 1997, and down from the 25.1% achieved
during the previous quarter. The reduction in gross profit margin for the
first quarter compared to the same quarter a year ago was primarily
attributable to increased overall OEM unit volumes, offset by modest increases
in channel sales and relatively level specialized technology sales. The gross
profit margin was also impacted as a result of premium prices paid for SGRAM on
the spot market and added factory labor costs to meet above forecasted demands
by our customer base. When compared to the previous quarter, the gross profit
margin declined due to lower levels of sales to the OEM channel in that
quarter.
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1651 North Glenville - Richardson, Texas 75081 - (972) 234-8750
Fax (972) 234-1306 - BBS (972) 437-9615
"We are pleased to report our ninth consecutive quarter of record profit,"
said William E. Ogle, STB's Chairman and Chief Executive Officer. "We were
able to meet our OEM customers upside demands on short notice for our products.
The recognition by the marketplace of STB's award-winning Velocity 128 product
has also been particularly gratifying," Ogle added.
The Company's commercial channel revenues increased modestly over 4th
quarter of 1997, but down slightly from the same quarter of fiscal 1997.
Although channel demand was strong, shipments were below expectations due to
limited controller chip availability resulting from the unexpected OEM upside
demand.
Revenues from the Specialized Technology Group increased by 53% over the
same quarter of fiscal 1997, although flat with the preceding quarter. During
the quarter, the Company successfully launched the first production units of
the Galileo flat panel display systems. In addition, the MVP product line for
workstations also performed well.
During the quarter, STB's Velocity 128 garnered the coveted "Editor's
Choice Award" from PC MAGAZINE. Overall during the quarter, STB's products
continued to be recognized in various publications, receiving a total of 23
different awards.
In addition, the Company announced today that it plans to commence a
public offering covering up to 3,000,000 shares of Common Stock, of which
2,775,000 shares will be offered by STB and 225,000 shares will be offered by
certain selling shareholders. An aggregate of up to 450,000 additional shares
may be offered by STB and the selling shareholders to cover over-allotments, if
any. Net proceeds to STB from the offering will be used to reduce indebtedness
and for general corporate purposes. The foregoing share numbers give effect to
a 3-for-2 split of STB's Common Stock effected on February 20, 1998.
A registration statement relating to the shares covered by the offering
will be filed with the Securities and Exchange Commission shortly. The
offering of these shares may only be made by means of a prospectus complying
with applicable securities laws. The shares may not be sold nor may offers to
buy be accepted prior to the time the registration statement becomes effective.
This release shall not constitute an offer to sell or the solicitation of any
offer to buy nor shall there be any sale of the shares in any state in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
STB Systems, Inc. (Nasdaq-STBI) designs, manufactures and sells multimedia
accelerators and other multimedia subsystem products for use primarily in
desktop personal computers. STB has established a history of designing award-
winning graphics controllers and writing specialized video drivers which
provide maximum software performance and compatibility. STB is one of the
largest suppliers of multimedia accelerators worldwide, as ranked by
International Data Corporation (IDC), and is registered as ISO 9002 compliant.
Founded in 1981 and headquartered in Richardson, Texas, STB Systems, Inc., also
has facilities in Houston (Texas), El Paso (Texas), Austin (Texas), Eugene
(Oregon), Juarez (Mexico), Belfast (Northern Ireland), London (UK), and Paris
(France).
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This press release contains forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. Such
statements are based on management's current expectations and are subject to a
number of factors and uncertainties which could cause actual results to differ
materially from those described herein. Such factors are described in "Risk
Factors" in the Company's Annual Report on Form 10-K for its 1997 fiscal year
and Quarterly Report on Form 10-Q for its third quarter July 31, 1997 as filed
with the Securities and Exchange Commission.
STB SYSTEMS, INC. and SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share data)
Three Months Ended
January 31, 1998 January 31, 1997
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Net Sales $ 78,758 $ 48,092
Cost of Sales 62,542 37,459
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Gross Profit 16,216 10,633
Research & Development 2,338 1,238
Sales & Marketing 4,424 3,286
General & Administrative 3,235 2,383
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Total Operating Expenses 9,997 6,907
Income from Operations 6,219 3,726
Interest Income (Expense) (518) (376)
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Income (Loss) Before Taxes 5,701 3,350
Provision for Income Taxes 1,896 1,098
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Net income $ 3,805 $ 2,252
Basic income per common share* $ .36 ** $ .22
Weighted average shares outstanding 10,461,695 10,158,549
Diluted net income per share* $ .33 ** $ .21
Weighted average shares outstanding 11,388,554 10,730,624
* all per share amounts have been adjusted for a 3 for 2 stock split effective
February 20, 1998.
** all per share amounts have been adjusted for a 3 for 2 stock split
effective February 20, 1998 and a 3 for 2 stock split effective
July 17, 1997.
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STB SYSTEMS, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
January 31, 1998 October 31, 1997
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Current Assets:
Cash and Cash Equivalents $ 3,391 $ 3,869
Accounts Receivable 49,806 47,208
Inventories 45,811 41,295
Other Current Assets 2,659 1,970
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Total Current Assets 101,667 94,342
Long Term Assets 14,100 15,212
Current Liabilities:
Short Term Debt 23,000 21,520
Accounts Payable 38,938 36,801
Accrued Expenses and
Other Current Liabilities 3,928 4,660
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Total Current Liabilities 65,866 62,981
Long Term Liabilities 2,538 3,111
Total Stockholders' Equity $ 47,363 $43,462
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