EXHIBIT 99.1
FOR IMMEDIATE RELEASE For more information contact:
David Brunton, Chief Financial Officer
SBE, Inc.
(925) 355-7700
davidb@sbei.com
SBE, Inc. Announces Second Quarter 2005 Results
SAN RAMON, CA -- May 25, 2005--SBE, Inc. (Nasdaq:SBEI), a leading provider of
high performance OEM network connectivity solutions, today reported results for
the three-month and six-month periods ended April 30, 2005.
Net sales for the second quarter ended April 30, 2005 were $1.7 million,
compared with $3.0 million for the second quarter ended April 30, 2004. Net loss
for the second quarter of fiscal 2005 was $936,000, or $0.18 per share, basic
and diluted, compared to net income for the second quarter of fiscal 2004 of
$54,000, or $0.01 per share, basic and diluted.
Net sales for the six months ended April 30, 2005 were $4.5 million, compared
with $5.9 million for the same period in 2004. Net loss was $760,000, or $0.15
per share, basic and diluted, respectively, for the six months ended April 30,
2004 compared to a net income of $581,000, or $0.12 and $0.90 per share, basic
and diluted, for the same period in 2004.
SBE ended the second quarter of fiscal 2005 with working capital (current assets
less current liabilities) of $3.2 million, compared to $3.9 million at the end
of fiscal 2004. No debt existed at either date.
Business Outlook
"We plan to remain focused on our two-fold strategy of maximizing short-term
opportunities while proactively investing in `impact' technologies that position
SBE for new design wins in existing and emerging markets," commented Dan Grey,
President and Chief Executive Officer of SBE. "Though our core products revenue
was relatively flat last quarter, we're pleased with the 125% increase in our
HighWire platform sales as compared to the same quarter last year."
"In March, we announced that we signed a definitive agreement to acquire PyX
Technologies, and earlier this month we announced that we entered into a
definitive agreement to raise $5.15M in a private placement of common stock and
warrants to purchase common stock with individual and institutional accredited
investors. The acquisition of PyX combined with the proceeds from the private
placement will allow us to bring a broader spectrum of IP storage solutions to
market and to maximize on the rapidly growing demand for iSCSI, "concluded Grey.
Conference Call Information
SBE's second quarter conference call will be held Thursday, May 26, 2005 at
11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time. To access the call, please
dial 800-875-9124 and enter access code number 6346276 or go to www.sbei.com
approximately 10 minutes prior to the start of the call.
A replay of SBE's quarterly conference call will be available for 24 hours. To
access the replay, please dial 800-642-1687 and enter code number 6346276. The
replay can also be accessed for one year following the conference call via the
company web site at www.sbei.com.
About SBE
SBE designs and provides network communications solutions for an extensive range
of applied computing applications. SBE offers a portfolio of standards-based
wide area network (WAN), local area network (LAN) and IP storage solutions, as
well as communications controllers, designed to enable optimal performance and
rapid deployment across a wide range of next generation networking systems.
Based in San Ramon, California, SBE is a publicly traded company (NASDAQ: SBEI)
with products sold worldwide through direct sales, OEMs and system integration
partners. For additional information, please visit www.sbei.com.
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This news release contains certain forward-looking statements that involve risks
and uncertainties, including statements about management's current estimates
regarding net sales, gross margins and operating costs for the remainder of
fiscal 2005, as well as statements about new product features, market
opportunity for new products, and the demand for services that may be offered by
SBE's customers. Such statements are only predictions and the company's actual
results may differ materially from those anticipated in these forward-looking
statements. Factors that may cause such differences include, but are not limited
to, risks related to the company's reliance on a small number of OEM customers,
rapidly changing product requirements, the introduction of new products, market
acceptance of the company's products, and reliance on strategic partners. These
factors and others are more fully discussed in the documents the company files
from time to time with the Securities and Exchange Commission, particularly, the
company's most recent Form 10-K and Form 10-Q.
SBE and the SBE logo are registered trademarks of SBE, Inc. All other brand or
product names are trademarks or registered trademarks of their respective
holders.
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SBE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and six months ended April 30, 2005 and 2004
(In thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
April 30, April 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net sales $ 1,706 $ 2,977 $ 4,520 $ 5,947
Cost of sales 1,076 1,417 2,305 2,742
----------- ----------- ----------- -----------
Gross profit 630 1,560 2,215 3,205
Product research and development 573 543 1,046 1,048
Sales and marketing 567 564 1,126 1,053
General and administrative 426 400 795 764
Loan reserve (benefit) -- -- -- (239)
----------- ----------- ----------- -----------
Total operating expenses 1,566 1,507 2,967 2,626
Operating income (loss) (936) 53 (752) 579
Interest and other income -- 1 (3) 2
----------- ----------- ----------- -----------
Income (loss) before income taxes (936) 54 (755) 581
Income tax benefit -- -- 5 --
----------- ----------- ----------- -----------
Net income (loss) $ (936) $ 54 $ (760) $ 581
=========== =========== =========== ===========
Basic income (loss) per share $ (0.18) $ 0.01 $ (0.15) $ 0.12
=========== =========== =========== ===========
Diluted income (loss) per share $ (0.18) $ 0.01 $ (0.15) $ 0.09
=========== =========== =========== ===========
Basic -- shares used in per
share computations 5,207 5,003 5,172 4,961
=========== =========== =========== ===========
Diluted -- shares used in per
share computations 5,207 6,030 5,172 6,134
=========== =========== =========== ===========
SBE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
April 30, October 31,
2005 2004
----------- -----------
Current assets:
Cash and cash equivalents $ 1,221 $ 1,849
Trade accounts receivable, net 1,599 1,668
Inventories 1,474 1,926
Other 262 227
----------- -----------
Total current assets 4,557 5,670
Property, plant and equipment, net 392 427
Capitalized software costs, net 149 48
Other 288 28
----------- -----------
Total assets $ 5,385 $ 6,173
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 854 $ 856
Other accrued expenses 520 875
----------- -----------
Total current liabilities 1,374 1,731
Other long-term liabilities 135 139
----------- -----------
Total liabilities 1,509 1,870
----------- -----------
Stockholders' equity:
Common stock 16,175 15,755
Deferred compensation (88) --
Accumulated deficit (12,211) (11,452)
----------- -----------
Total stockholders' equity 3,875 4,303
----------- -----------
Total liabilities and stockholders' equity $ 5,385 $ 6,173
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