SBE, Inc. Reports Fourth Quarter and Fiscal 2005 Results.SAN RAMON San Ramon (Spanish for "Saint Raymond") may refer to one of the following places:
(networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (IP) based networking solutions for next generation storage and communications original equipment manufacturers (OEMs), today reported results for the three months and fiscal year ended October 31, 2005. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the fiscal year ended October 31, 2005 were $8.1 million, including $1.0 million attributable to sales to Hewlett-Packard (HP), compared to net sales of $11.1 million in fiscal 2004, including $4.9 million attributable to sales to HP. Net sales for the fourth quarter of fiscal 2005 were $1.8 million. None of the company's net sales in the fourth quarter of fiscal 2005 was attributable to sales to HP. Net sales for the corresponding quarter in fiscal 2004 were $2.2 million, including $0.8 million attributable to sales to HP. Net loss for fiscal 2005 amounted to $4.2 million, or $0.66 per share basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , compared to a net loss for fiscal 2004 of $1.7 million, or $0.33 per share basic and diluted. The loss for the year ended October 31, 2005 and 2004 include $1.2 million and $1.8 million, respectively, of non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) for the amortization of intellectual property, stock options and inventory valuation charges for obsolete and slow-moving products. Net loss for the fourth quarter of 2005 amounted to $2.5 million, or $0.26 per share basic and diluted, compared to a net loss for the fourth quarter of 2004 of $2.3 million, or $0.46 per share basic and diluted. The loss for the fourth quarters ended October 31, 2005 and 2004 include $1.2 million and $1.5 million, respectively, of non-cash expenses for the amortization of intellectual property, stock options and inventory valuation charges for obsolete and slow-moving products. These non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. were included in cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold . The company's cash balance was $3.6 million and $1.8 million at October 31, 2005 and 2004, respectively, and no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. existed at either date. "The expenses and subsequent net losses recorded for fiscal 2005 were expected as part of our strategy to fully leverage the PyX acquisition and effectively drive our iSCSI (Internet Small Computer System Interface) initiatives," commented David Brunton, Chief Financial Officer of SBE. "During the last two quarters, we invested aggressively in R&D, technical support, and sales/marketing to further bolster the technical advantages and feature sets of our iSCSI products as well as expand our reach into new markets and applications worldwide. We anticipate that incurring critical investment expenditures in the short-term will position the company to yield healthier returns for our shareholders in the long-term." Significant Milestones in Fiscal 2005 --Acquisition of PyX Technologies. Through its acquisition of PyX, the company acquired iSCSI transport software solutions developed for enterprise storage suppliers seeking reliable, robust solutions for their customer base. Merging PyX's iSCSI software with the company's traditional embedded Inserted into. See embedded system. communications hardware provides the company with the necessary hardware technology and software data transport to create unique and high-performance, IP-based storage blades for use by the company's traditional telecommunications customers. --Design Wins for iSCSI Software Solutions. LSI LSI: see integrated circuit. (Large Scale Integration) Between 3,000 and 100,000 transistors on a chip. See SSI, MSI, VLSI and ULSI. Logic selected the PyX iSCSI software for integration into its intelligent iMegaRAID(R) family of iSCSI RAID solutions, and ONStor Inc., a leading Enterprise NAS gateway A front end to disk storage that is highly scalable. A NAS gateway functions like a diskless file server with unlimited storage. Unlike the traditional "legacy" NAS device, which contains the file sharing protocol for access, the file system for storage and the disks themselves, a NAS provider, licensed the PyX iSCSI product for use with its enterprise-level Bobcat bobcat: see lynx. bobcat Bobtailed, long-legged North American cat (Lynx rufus) found in forests and deserts from southern Canada to southern Mexico. It is a close relative of the lynx and caracal. Series of Network Attached Storage (NAS (1) See network access server. (2) (Network Attached Storage) A specialized file server that connects to the network. A NAS device contains a slimmed-down operating system and a file system and processes only I/O requests by supporting the popular ) Gateways. The PyX iSCSI software products have been integrated into solutions serving a variety of applications, including security surveillance, storage virtualization Treating storage as a single logical entity without regard to the hierarchy of physical media that may be involved or that may change. It enables the applications to read from and write to a single pool of storage rather then individual disks, tapes and optical devices. , remote storage and NAS. --Expansion of Embedded Product Portfolio. During the year, the company launched two high-density Digital Signal Processor A digital signal processor (DSP) is a specialized microprocessor designed specifically for digital signal processing, generally in real-time computing. Characteristics of typical Digital Signal Processors
(company) Texas Instruments - (TI) A US electronics company. A TI engineer, Jack Kilby invented the integrated circuit in 1958. Three TI employees left the company in 1982 to start Compaq. . These modules are designed to serve a broad spectrum of Voice over Internet Protocol (VoIP) and video-based applications. In June 2005, the company introduced an intelligent, PowerPC-based processor board that can be used to create a VoIP or video gateway blade when bundled with the company's DSP and wide area networking (WAN) modules. Additional product developments include quad Gigabit Ethernet An Ethernet standard that transmits at 1 Gbps. Used mostly to connect high-end workstations and servers as well as for network backbones, Gigabit Ethernet transmits full duplex from point to point using switches and half duplex in a shared environment (CSMA/CD) using a hub. based on the emerging AdvancedMC form factor. "I'm pleased with the progress that we've made thus far in positioning our team to penetrate the growing IP market with iSCSI and VoIP solutions," said Dan Grey, President and Chief Executive Officer of SBE. "Although last quarter's revenues weren't as strong as we anticipated, the wheels are clearly in motion, and we are continuing to see more evidence of gaining traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in the marketplace, particularly with our iSCSI solutions. Last week, we announced several new design wins, including YMI YMI Yang-Ming International Corporation YMI Young Minds Inspired YMI Youth Media International and Open Source Storage. These wins resulted directly from broadening our distribution channel to include established manufacturer's representative firms, like Fourfront, Centaur centaur (sĕn`tôr), in Greek mythology, creature, half man and half horse. The centaurs were fathered by Ixion or by Centaurus, who was Ixion's son. and PSI. Given the strong sales activity and numerous product evaluations in which we're currently engaged with storage OEMs, we expect to close several more iSCSI deals in the first half of 2006." Business Outlook "As we head into fiscal 2006, we expect our Storage group to build on the momentum that our iSCSI software has generated to date by continuing to expand our distribution reach and closing new business with storage OEMs that need to differentiate and enhance their solutions with iSCSI functionality," said Grey. "On the Embedded side, our team will remain focused on completing development and release of our DSP products and penetrating the voice, video and multimedia application markets with our advanced DSP and VoIP solutions." "To further capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the SBE acquisition of PyX, we expect to leverage the technology and products from both the Storage and Embedded groups to develop innovative hardware and software solutions, much like the HighWire SAS (1) (SAS Institute Inc., Cary, NC, www.sas.com) A software company that specializes in data warehousing and decision support software based on the SAS System. Founded in 1976, SAS is one of the world's largest privately held software companies. See SAS System. iBlade(TM) storage product that we announced a couple of weeks ago. High-performance, cost-effective IP-based storage blades can uniquely address the requirements of our traditional telecommunications customers," concluded Grey. Conference Call Information The company's year-end and fourth quarter conference call will be held Thursday, December 15, 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 code number 2990705 or go to www.sbei.com approximately 10 minutes prior to the start of the call. A replay of the company's fourth quarter conference call will be available for 48 hours. To access the replay, please dial (800) 642-1687 and enter code number 2990705. The replay can also be accessed following the conference call via the company's web site at www.sbei.com. About SBE SBE designs and provides IP-based networking solutions for an extensive range of applied computing computing - computer applications. SBE delivers a portfolio of scalable, standards-based hardware and software products, including iSCSI and VoIP, designed to enable optimal performance and rapid deployment across a wide range of next-generation communications and storage systems. Based in San Ramon, California San Ramon is a city in Contra Costa County, California, United States. It is a part of the San Francisco Bay Area. Since 1980, the population of San Ramon has increased by over 128% from 22,356 to 51,027 in 2005. , SBE is a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. (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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Form 10-Q Form 10-Q See 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 months and years ended October 31, 2005 and 2004
(In thousands, except per share amounts)
Three months Fiscal years
ended ended
October 31, October 31,
2005 2004 2005 2004
------- ------- ------- -------
(unaudited)
----------------- -------- --------
Net sales $ 1,815 $ 2,220 $ 8,056 $11,066
Cost of sales 2,027 2,545 5,404 6,646
------- ------- ------- -------
Gross profit (loss) (212) (325) 2,652 4,420
Operating expenses:
Product research and
development 1,022 815 2,694 2,411
Sales and marketing 647 585 2,293 2,177
General and administrative 665 615 1,906 1,755
Loan benefit --- --- --- (239)
------- ------- ------- -------
Total operating expenses 2,334 2,015 6,893 6,104
------- ------- ------- -------
Operating loss (2,546) (2,340) (4,241) (1,684)
Interest income 27 1 22 5
Other expense (6) --- (6) ---
------- ------- ------- -------
Loss before income taxes (2,525) (2,339) (4,225) (1,679)
Provision for income taxes --- --- (5) ---
------- ------- ------- -------
Net loss $(2,525) $(2,339) $(4,230) $(1,679)
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Net loss per common share:
Basic $ (0.26) $ (0.46) $ (0.66) $ (0.33)
Diluted $ (0.26) $ (0.46) $ (0.66) $ (0.33)
======= ======= ======= =======
Shares used in per share calculation:
Basic 9,879 5,087 6,439 5,022
Diluted 9,879 5,087 6,439 5,022
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SBE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 31, October 31,
2005 2004
----------- -----------
Current assets:
Cash and cash equivalents $ 3,632 $ 1,849
Trade accounts receivable, net 1,555 1,668
Inventories 1,283 1,926
Other 293 227
----------- -----------
Total current assets 6,763 5,670
Property, plant and equipment, net 563 427
Capitalized software costs, net 225 48
Intellectual property, net 11,199 ---
Other 82 28
----------- -----------
Total assets $ 18,832 $ 6,173
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 743 $ 856
Accrued payroll and employee benefits 155 391
Other accrued expenses 345 484
----------- -----------
Total current liabilities 1,243 1,731
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Other long-term liabilities 241 139
----------- -----------
Total liabilities 1,484 1 ,870
----------- -----------
Stockholders' equity:
Common stock 35,431 15,755
Deferred compensation (2,402) ---
Accumulated deficit (15,681) (11,452)
----------- -----------
Total stockholders' equity 17,348 4,303
----------- -----------
Total liabilities and
stockholders' equity$ $ 18,832 $ 6,173
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