SBE, Inc. Reports Fourth Quarter and Fiscal 2006 Results
January 04 2007 - 7:00AM
Business Wire
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�
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