Exhibit 99.1
SBE, Inc. Announces Second Quarter 2003 Results;
Third Consecutive Quarterly Profit
SAN RAMON, Calif.--(BUSINESS WIRE)--May 21, 2003--SBE, Inc.
(Nasdaq:SBEI), a leading supplier of high performance OEM network
connectivity solutions, today reported results for the three-month and
six-month periods ended April 30, 2003.
Net sales for the second quarter of 2003 were $1.8 million,
compared with $1.7 million for the second quarter ended April 30,
2002. Net income for the second quarter of 2003 was $51,000, or $0.01
per share (basic and diluted), compared to a net loss for the second
quarter of 2002 of $961,000, or $0.28 per share (basic and diluted).
Net sales for the six months ended April 30, 2003 were $3.6
million, compared with $3.0 million for the same period last year. Net
income was $143,000, or $0.04 per share (basic and diluted), for the
six months ended April 30, 2003 compared to a net loss of $2.2
million, or $0.63 per share (basic and diluted), for the first six
months of fiscal 2002.
Our gross margin for the second quarter of 2003 was 62% compared
to 53% for the same quarter in 2002. Our gross margin for the six
months ended April 30, 2003 was 61%, compared to 54% reported for the
same period of 2002. In both cases, the increase in gross margin was
primarily due to more favorable component and manufacturing pricing in
addition to a more favorable product mix. We closed the quarter with
$1.7 million in cash and cash equivalents and $3.3 million in working
capital (current assets less current liabilities), a slight increase
from $1.6 million in cash and cash equivalents and $3.0 million in
working capital at October 31, 2002.
Total operating expenses decreased 43 percent in the second
quarter of 2003 to $1.1 million compared to $1.9 million in the same
quarter of 2002, primarily as a result of reductions of our headcount,
real estate obligations and certain non-essential spending as we
continued to focus on cost containment and cash preservation. Total
operating expenses for the six months ended April 30, 2003 were $2.1
million compared to $3.8 million in the same period one year ago.
"In this tight market, we're proud to have achieved a third
consecutive quarter of profitability," said William B. Heye, president
and CEO. "Our mix of sales is producing good margins and our operating
expenses remain under control. We're doing well in new design activity
and had two significant design wins in the second quarter. One of
these is for a new generation of FAA communication systems and the
other is for an SS7 application in a carrier-based network. We are
also pleased with our progress in diversifying our customer base. We
sold and shipped product to 26 new customers in the past six months.
While many of these customers are in the early stage of their
programs, we enter the third quarter with an order backlog of $900,000
and a promising array of new accounts," Heye concluded.
Business Outlook
The following statements are based on current expectations. These
statements are forward-looking, and actual results may differ
materially. See the cautionary statement at the end of this press
release for a summary of the risks associated with forward-looking
statements and where to find more information on such risks.
"Assuming current market conditions continue, we expect our sales
and operating results for the quarter ending July 31, 2003 to be
similar to the second quarter. For the longer term, we are dependent
on renewed spending by businesses on data and telecommunications
products. We remain committed to taking the actions necessary to
remain profitable in the near term while positioning for long-term
growth," Heye said.
Conference Call Information
SBE's second quarter conference call will be held Thursday, May
22, 2003 at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time. To
access the call please dial 800/603-7874 and enter access code
number 262689 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 262689. The replay can also be accessed via the company
web site at www.sbei.com.
About SBE
SBE provides high performance, standards-based products for a wide
range of applied computing applications. Our broad offering of WAN and
LAN adapters along with our HighWire family of communication
controllers enable the delivery of cost-effective network connectivity
interfaces across the full range of next generation networking
systems.
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 2003, 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.
SBE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and six months ended April 30, 2003 and 2002
(In thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
April 30, April 30,
2003 2002 2003 2002
--------- --------- --------- ---------
Net sales $1,767 $1,724 $3,628 $3,007
Cost of sales 679 810 1,412 1,397
--------- --------- --------- ---------
Gross profit 1,088 914 2,216 1,610
Product research and
development 294 771 579 1,565
Sales and marketing 336 569 643 1,109
General and administrative 437 543 878 1,134
--------- --------- --------- ---------
Total operating expenses 1,067 1,883 2,100 3,808
--------- --------- --------- ---------
Operating income (loss) 21 (969) 116 (2,198)
Interest and other income 8 8 9 20
--------- --------- --------- ---------
Income (loss) before income
taxes $29 $(961) $125 $(2,178)
Income tax benefit (22) -- (18) --
--------- --------- --------- ---------
Net income (loss) $51 $(961) $143 $(2,178)
========= ========= ========= =========
Basic income (loss) per share $0.01 $(0.28) $0.04 $(0.63)
========= ========= ========= =========
Diluted income (loss) per
share $0.01 $(0.28) $0.04 $(0.63)
========= ========= ========= =========
Basic -- shares used in per
share computations 4,085 3,467 4,071 3,462
========= ========= ========= =========
Diluted -- shares used in per
share computations 4,085 3,467 4,072 3,462
========= ========= ========= =========
SBE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
April 30, October 31,
2003 2002
----------- -----------
Current assets:
Cash and cash equivalents $1,655 $1,582
Trade accounts receivable, net 868 888
Inventories, net 1,666 1,910
Other 199 220
----------- -----------
Total current assets 4,388 4,600
Property, plant and equipment, net 371 533
Capitalized software costs, net 103 110
Other 78 78
----------- -----------
Total assets $4,940 $5,321
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $151 $488
Other accrued expenses 453 690
Current portion of refundable deposit 447 447
----------- -----------
Total current liabilities 1,051 1,625
Total liabilities 1,051 1,625
----------- -----------
Commitments
Stockholders' equity:
Common stock 14,737 14,711
Treasury stock (409) (409)
Note receivable from stockholder (245) (270)
Accumulated deficit (10,194) (10,336)
----------- -----------
Total stockholders' equity 3,889 3,696
----------- -----------
Total liabilities and stockholders'
equity $4,940 $5,321
=========== ===========
CONTACT: SBE, Inc.
David W. Brunton, 925/355-7700
davidb@sbei.com