SBE, Inc. Reports First Quarter 2007 Results

  
    
  
  
    
      SBE, Inc. (Nasdaq:SBEI), a provider of high-performance IP storage 
      solutions serving remote back-up and disaster recovery applications, today 
      reported results for the three months ended January 31, 2007.
    
    
      “A shareholders’ 
      meeting has been scheduled for the end of March and expect to close the 
      sale of our hardware business to One Stop shortly thereafter. We will 
      continue to sell and license our storage software solutions. We are 
      committed to supporting existing and new customers and will continue our 
      software development efforts,” said Greg 
      Yamamoto, President and Chief Executive Officer of SBE.
    
    
      Net sales for the first quarter ended January 31, 2007 were $1.2 
      million, compared to net sales of $1.4 million in the same quarter of 
      fiscal 2006. Net loss for the first quarter of fiscal 2007 was $1.1 
      million, or $0.10 per share basic and diluted, compared to a net loss 
      for the same period of fiscal 2006 of $2.7 million, or $0.28 per share 
      basic and diluted.
    
    
      The Company’s cash balance was $443,000 and 
      $1.1 million at January 31, 2007 and October 31, 2006, respectively, and 
      no long-term debt existed at either date.
    
    
      On January 11, 2007, the Company signed an asset purchase agreement with 
      One Stop Systems, Inc., pursuant to which the Company agreed to sell all 
      of the assets associated with its embedded hardware business (excluding 
      cash, accounts receivable and other excluded assets specified in the 
      asset purchase agreement) to One Stop Systems for $2.2 million in cash 
      and One Stop Systems’ assumption of the Company’s 
      real estate and certain equipment leases. A special meeting of the SBE 
      stockholders has been scheduled for March 29, 2007 to approve this 
      transaction and to approve a proposed 1 for 5 reverse stock split to 
      enable the Company to comply with the Nasdaq Capital Market’s 
      continued listing criteria. A proxy statement detailing the transaction 
      and reverse stock split has been mailed to all SBE shareholders of 
      record as of March 6, 2007.
    
    
      On January 19, 2007, the Company entered into a definitive merger 
      agreement with Neonode Inc., a Delaware corporation. Founded in 2001, 
      Neonode is a Swedish developer and pioneer of touchscreen mobile phones. 
      Neonode’s patented zForce™ 
      touchscreen technology and Neno™ user 
      interface combine to maximize display area and provide a unique 
      one-hand, onscreen navigation experience. In February 2007, Neonode 
      showcased its new mobile phone, the N2, at the 3GSM World Congress in 
      Barcelona, Spain to critical acclaim.
    
    
      It is anticipated that the Company will change its name to “Neonode 
      Inc.” upon consummation of the merger. This 
      transaction requires the approval of the SBE stockholders, and the 
      Company is in the process of preparing a proxy statement for such 
      purpose.
    
    
      About SBE
    
    
      SBE designs and provides IP-based storage networking solutions for an 
      extensive range of business critical applications, including back-up and 
      disaster recovery. SBE delivers a portfolio of scalable, standards-based 
      hardware and software products designed to enable optimal performance 
      and rapid deployment across a wide range of next-generation storage 
      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. More information is 
      available at www.sbei.com.
    
    
      Forward-Looking Statements
    
    
      This news release contains certain forward-looking statements that 
      involve risks and uncertainties, including statements about consummation 
      of the proposed merger transaction and the proposed asset sale 
      transaction. 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, the ability of SBE, One Stop and 
      Neonode to comply with the closing conditions necessary in order to 
      consummate the transactions. 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.
    
    
      - Tables Follow -
    
    
      
        
          
            SBE, INC.
          
        
      
      
        
           
        
      
      
        
          
            CONDENSED STATEMENTS OF OPERATIONS
          
        
      
      
        
          
            for the three months ended January 31, 2007 and 2006
          
        
      
      
        
          (In thousands, except per share amounts)
        
      
      
        
          (Unaudited)
        
      
      
        
           
        
      
      
        
        
        
        
        
          Three months ended
        
      
      
        
        
        
        
        
          January 31,
        
      
      
        
        
        
        
        
          2007 
        
        
        
        
          2006 
        
      
      
        
           
        
      
      
        
          Net sales
        
        
        
        
          $
        
        
          
            1,207 
          
        
        
        
        
          
            $
          
        
        
          
            1,400 
          
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating Expenses
        
        
        
        
        
        
        
        
        
      
      
        
          
            Amortization and impairment of acquired software and intellectual 
            property
          
        
        
        
        
        
        
          188 
        
        
        
        
        
        
          1,022 
        
      
      
        
          Cost of hardware and other revenue
        
        
        
        
        
        
          734 
        
        
        
        
        
        
          803 
        
      
      
        
          Product research and development
        
        
        
        
        
        
          585 
        
        
        
        
        
        
          946 
        
      
      
        
          Sales and marketing
        
        
        
        
        
        
          364 
        
        
        
        
        
        
          598 
        
      
      
        
          General and administrative
        
        
        
        
           
        
        
          462 
        
        
        
        
           
        
        
          771 
        
      
      
        
           
        
      
      
        
          Total operating expenses
        
        
        
        
           
        
        
          2,333 
        
        
        
        
           
        
        
          4,140 
        
      
      
        
           
        
      
      
        
          Operating loss
        
        
        
        
        
        
          (1,126)
        
        
        
        
        
        
          (2,740)
        
      
      
        
           
        
      
      
        
          Interest and other income
        
        
        
        
          1 
        
        
        
        
           
        
        
          18 
        
      
      
        
          Loss before income taxes
        
        
        
        
        
        
          (1,125)
        
        
        
        
        
        
          (2,722)
        
      
      
        
           
        
      
      
        
          Provision for income taxes
        
        
        
        
          4 
        
        
        
        
           
        
        
          5 
        
      
      
        
           
        
      
      
        
          Net loss
        
        
        
        
          $
        
        
          
            (1,129)
          
        
        
        
        
          
            $
          
        
        
          (2,727)
        
      
      
        
           
        
      
      
        
          Basic and diluted loss per share
        
        
        
        
          $
        
        
          
            (0.10)
          
        
        
        
        
          
            $
          
        
        
          (0.28)
        
      
      
        
           
        
      
      
        
          
             
          
        
        
        
        
        
        
        
        
        
      
      
        
          
            Basic and diluted- shares used in per share computations
          
        
        
        
        
           
        
        
          11,051 
        
        
        
        
           
        
        
          9,895 
        
      
    
    
      
        
          
            SBE, INC.
          
        
      
      
        
          
            CONDENSED BALANCE SHEETS
          
        
      
      
        
          (In thousands)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          January 31,
        
        
        
        
          October 31,
        
      
      
        
        
        
        
        
          
            2007 
          
        
        
        
        
          2006 
        
      
      
        
          Current assets:
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
        
        
          $
        
        
          443 
        
        
        
        
          $
        
        
          1,147 
        
      
      
        
          Trade accounts receivable, net
        
        
        
        
        
        
          963 
        
        
        
        
        
        
          930 
        
      
      
        
          Inventories
        
        
        
        
        
        
          714 
        
        
        
        
        
        
          739 
        
      
      
        
          Other
        
        
        
        
           
        
        
          221 
        
        
        
        
           
        
        
          177 
        
      
      
        
          Total current assets
        
        
        
        
        
        
          2,341 
        
        
        
        
        
        
          2,993 
        
      
      
        
           
        
      
      
        
          Property, plant and equipment, net
        
        
        
        
        
        
          458 
        
        
        
        
        
        
          508 
        
      
      
        
          Capitalized software costs, net
        
        
        
        
        
        
          1,126 
        
        
        
        
        
        
          1,314 
        
      
      
        
          Other
        
        
        
        
           
        
        
          52 
        
        
        
        
           
        
        
          53 
        
      
      
        
          Total assets
        
        
        
        
          $
        
        
          3,977 
        
        
        
        
          $
        
        
          4,868 
        
      
      
        
           
        
      
      
        
           
        
      
      
        
          
            LIABILITIES AND STOCKHOLDERS' EQUITY
          
        
        
        
        
        
        
        
        
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
        
        
      
      
        
          Trade accounts payable
        
        
        
        
          $
        
        
          622 
        
        
        
        
          $
        
        
          557 
        
      
      
        
          Accrued payroll and employee benefits
        
        
        
        
        
        
          54 
        
        
        
        
        
        
          105 
        
      
      
        
          
            Deferred revenue
          
        
        
        
        
        
        
          299 
        
        
        
        
        
        
          432 
        
      
      
        
          Other accrued expenses
        
        
        
        
           
        
        
          288 
        
        
        
        
           
        
        
          198 
        
      
      
        
          Total current liabilities
        
        
        
        
           
        
        
          1,263 
        
        
        
        
           
        
        
          1,292 
        
      
      
        
           
        
      
      
        
          Other long-term liabilities
        
        
        
        
           
        
        
          232 
        
        
        
        
           
        
        
          255 
        
      
      
        
          Total liabilities
        
        
        
        
           
        
        
          1,495 
        
        
        
        
           
        
        
          1,547 
        
      
      
        
           
        
      
      
        
          Stockholders' equity:
        
        
        
        
        
        
        
        
        
      
      
        
          Common stock
        
        
        
        
        
        
          33,476 
        
        
        
        
        
        
          35,186 
        
      
      
        
          Accumulated deficit
        
        
        
        
           
        
        
          (32,994)
        
        
        
        
           
        
        
          (31,865)
        
      
      
        
          Total stockholders' equity
        
        
        
        
           
        
        
          2,482 
        
        
        
        
           
        
        
          3,321 
        
      
      
        
          Total liabilities and stockholders' equity
        
        
        
        
          $
        
        
          3,977 
        
        
        
        
          $
        
        
          4,868