Sbe (NASDAQ:SBEI)
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SBE, Inc. (Nasdaq:SBEI), a leading provider of high-performance IP
storage solutions serving remote back-up and disaster recovery
applications, today reported results for the three months and
fiscal year ended October 31, 2006.
“We are looking at all strategic alternatives
that may enhance shareholder value as we continue to reduce our cash
burn rate,” said Greg Yamamoto, President and
Chief Executive Officer of SBE. “During the
quarter just ended we used $215,000 of cash compared to using $1.4
million of cash in the same quarter last year. We have also been
successful in reducing our inventory from $1.3 million at the beginning
of the year to $740,000 at year-end. The current inventory level better
matches our current sales levels without negatively impacting our
customers,” continued Yamamoto.
Net sales for the fiscal year ended October 31, 2006 were $6.1 million
compared to net sales of $8.1 million in fiscal 2005. Net sales for the
fourth quarter of fiscal 2006 were $1.4 million. Net sales for the
corresponding quarter in fiscal 2005 were $1.8 million.
Net loss for fiscal 2006 amounted to $16.2 million, or $1.57 per share
basic and diluted, compared to a net loss for fiscal 2005 of $4.2
million, or $0.66 per share basic and diluted.
The loss for the year ended October 31, 2006 includes $12.6 million of
non-cash expenses detailed below:
$6.5 million of non-cash expense attributable to an asset impairment
write-down of software acquired from PyX Technologies;
$3.4 million of non-cash expense primarily related to the quarterly
recurring amortization of software acquired from PyX Technologies;
$0.3 million of inventory valuation charges for obsolete and
slow-moving products and the discontinuance of our VoIP products;
$0.2 million of depreciation and amortization expense;
$0.8 million of stock-based compensation expense resulting from stock
issued to employees; and
$1.4 million of stock-based compensation expense resulting from the
company’s required adoption of Statement of
Financial Accounting Standards No. 123 (revised 2004), “Share-Based
Payments,” (“SFAS
123R”) at the beginning of the year.
The loss for the year ended October 31, 2005 includes $1.4 million of
non-cash expenses detailed below:
$1.0 million of non-cash expense attributable to the quarterly
recurring amortization of software acquired from PyX Technologies;
$0.2 million of stock-based compensation expense related to the
acquisition of PyX Technologies; and
$0.2 million of depreciation and amortization expense.
Net loss for the fourth quarter of 2006 amounted to $2.6 million, or
$0.24 per share basic and diluted, compared to a net loss for the fourth
quarter of 2005 of $2.5 million, or $0.26 per share basic and diluted.
The loss for the quarter ended October 31, 2006 includes $1.7 million of
non-cash expenses detailed below:
$1.0 million of non-cash expense attributable to an asset impairment
write-down of software acquired from PyX Technologies;
$0.3 million of non-cash expense attributable to the quarterly
recurring amortization of software acquired from PyX Technologies;
$0.1 million of stock-based compensation expense resulting from stock
issued to employees; and
$0.3 million of stock-based compensation expense resulting from the
company’s required adoption of SFAS 123R at
the beginning of the year.
The loss for the quarter ended October 31, 2005 includes $1.2 million of
non-cash expenses detailed below:
$1.0 million of non-cash expense attributable to the quarterly
recurring amortization of software acquired from PyX Technologies; and
$0.2 million of stock-based compensation expense related to the
acquisition of PyX Technologies.
The company’s cash balance was $1.2 million
and $3.6 million at October 31, 2006 and 2005, respectively, and no
long-term debt existed at either date.
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 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.
- Tables Follow -
SBE, INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONSFor the three months and years ended October 31,
2006 and 2005(In thousands, except per share amounts)
Three months endedOctober 31,
Fiscal years endedOctober 31,
2006
2005
2006
2005
(unaudited)
Net sales
$
1,359
$
1,815
$
6,127
$
8,056
Operating expenses:
Amortization of acquired software
1,331
1,023
9,894
1,047
Cost of hardware and other revenue
923
1,004
4,046
4,357
Product research and development
815
1,022
3,979
2,694
Sales and marketing
433
647
2,180
2,293
General and administrative
445
665
2,246
1,906
Total operating expenses
3,947
4,361
22,345
12,297
Operating loss
(2,588)
(2,546)
(16,218)
(4,241)
Interest income
4
27
42
22
Other expense
---
(6)
---
(6)
Loss before income taxes
(2,584)
(2,525)
(16,176)
(4,225)
Provision for income taxes
---
---
(7)
(5)
Net loss
$
(2,584)
$
(2,525)
$
(16,183)
$
(4,230)
Net loss per common share:
Basic
$
(0.24)
$
(0.26)
$
(1.57)
$
(0.66)
Diluted
$
(0.24)
$
(0.26)
$
(1.57)
$
(0.66)
Shares used in per share calculation:
Basic
10,807
9,879
10,304
6,439
Diluted
10,807
9,879
10,304
6,439
SBE, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In
thousands)
October 31,2006
October 31,2005
Current assets:
Cash and cash equivalents
$
1,147
$
3,632
Trade accounts receivable, net
930
1,555
Inventories
739
1,283
Other
177
293
Total current assets
2,993
6,763
Property, plant and equipment, net
508
563
Capitalized software costs, net
1,314
11,424
Other
53
82
Total assets
$
4,868
$
18,832
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable
$
557
$
743
Accrued payroll and employee benefits
105
155
Deferred revenue
432
176
Other accrued expenses
198
169
Total current liabilities
1,292
1,243
Other long-term liabilities
255
241
Total liabilities
1,547
1,484
Stockholders' equity:
Common stock
35,186
35,431
Deferred compensation
---
(2,402)
Accumulated deficit
(31,865)
(15,681)
Total stockholders' equity
3,321
17,348
Total liabilities and stockholders' equity
$
4,868
$
18,832