5/23/2003 - SBE, Inc. (NASDAQ: SBEI), a leading supplier of high performance OEM network connectivity solutions, 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.
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.
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.
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.
SBE and the SBE logo are registered trademarks of SBE, Inc.
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