Product category:
Networking Hardware
News Release from: SBS Technologies
Edited by the Electronicstalk Editorial
Team on 20 April 2004
SBS returns to solid operating income
SBS Technologies has published results for its third quarter ended 31st March 2004.
SBS Technologies has published results for its third quarter ended 31st March 2004 "We have completed another successful quarter
This article was originally published on Electronicstalk on 19 Aug 2002 at 8.00am (UK)
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With increased revenue and a return to solid operating income, we are meeting our operating and financial objectives.
Both the Americas and European businesses grew this quarter, and the quoting activity and design win funnel continue to grow", said Clarence W Peckham, CEO of SBS Technologies.
Sales for the third quarter were $36.6 million, an increase of 26.6% compared with $28.9 million in sales for last year's third quarter.
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On a sequential basis, total company sales increased 12.6%, compared with $32.5 million in sales for the quarter ended 31st December 2003.
Sales for the nine months ended 31st March 2004 were $95.7 million, an 11.2% increase from $86.0 million for the same period of the prior fiscal year.
By segment, sales for the third quarter by the Americas Group were $26.3 million, an increase of 15.6%, and sales by the Europe Group were $10.3 million, an increase of 67.1%, 16% of which is a result of changes in currency exchange rates, both compared with the third quarter of the previous fiscal year.
On a sequential basis, sales by the Americas Group increased 12.0% and sales by the Europe Group increased 14.1%, both compared with the quarter ended 31st December 2003.
Sales for the nine months ended 31st March 2004 by the Americas Group were $70.0 million, a decrease of 2.5%, and sales by the Europe Group were $25.7 million, an increase of 80.7%, 16% of which is a result of changes in currency exchange rates, both compared with the nine month period ended 31st March 2003.
The Europe Group's third quarter and nine months sales for fiscal year 2004 include an increase of approximately $500,000 and $2.5 million, respectively, previously included in the Americas Group due to the transfer during the quarter ended September 30, 2003 of sales and support for SBS' European customers to SBS' German operation.
By end market, for the quarter ended 31st March 2004, sales to government customers were $17.8 million, an increase of 19.2%, sales to commercial customers were $11.7 million, an increase of 30.5%, and sales to communications customers were $7.1 million, an increase of 41.6%, all compared with the third quarter of last year.
On a sequential basis, sales to government customers were relatively unchanged, sales to commercial customers increased 31.7%, and sales to communications customers increased 24.3%, all compared with the quarter ended 31st December 2003.
By end market, for the nine months ended 31st March 2004, sales to government customers were $48.9 million, an increase of 11.7%, sales to commercial customers were $29.2 million, a decrease of 1.4%, and sales to communications customers were $17.6 million, an increase of 39.5%, all compared with the same period of the prior fiscal year.
To align with current management responsibility, sales to a majority of SBS' enterprise customers are reflected as commercial sales.
Net income for the quarter ended 31st March 2004 was $2.1 million, compared with $811,000 for the same period of the prior fiscal year.
Net income for the nine months ended 31st March 2004 was $2.5 million.
For the nine months ended 31st March 2003, income before the cumulative effect of the change in accounting for goodwill was $1.5 million and net loss was ($4.6) million including the cumulative effect of this change.
Net income per common share - assuming dilution, for the quarter ended 31st March 2004 was $0.14, compared with $0.06 reported for the third quarter of the prior fiscal year.
Net income per common share - assuming dilution, for the nine months ended 31st March 2004 was $0.16.
For the nine months ended 31st March 2003, income per common share - assuming dilution was $0.10, before the cumulative effect of the change in accounting for goodwill, and net loss per common share - assuming dilution was ($0.31) including the cumulative effect of this change.
Restructuring costs associated with the closure of the Carlsbad, California facility negatively impacted net income per common share - assuming dilution by approximately ($0.01) and ($0.11) on an after tax basis for the three and nine months ended 31st March 2004, respectively.
All costs associated with the closure of the Carlsbad, California facility have now been recognised in the financial statements.
The financial results for the nine months ended 31st March 2003 include a transitional impairment charge of $6.1 million, net of tax, or ($0.41) per common share - assuming dilution, for the cumulative effect of the change in accounting for goodwill, resulting from SBS' adoption of SFAS 142 effective 1st July 2002.
The total cash balance at the end of the third quarter was $37.5 million compared with $42.4 million for the quarter ended 31st December 2003, and SBS remains debt free.
A majority of the cash decrease for the quarter was due to the purchase of inventory as the company adjusted its balances to meet current customer commitments.
Gross profit for the quarter as a percentage of sales was 48.4%, compared with 48.9% for the third quarter of last year, and 49.3% for the preceding quarter.
The decrease for this quarter in gross profit as a percentage of sales compared with the preceding quarter is primarily due to the impact of sales relating to several large, lower margin communications and commercial production orders.
Total company backlog as of 31st March 2004 was approximately $44.4 million, compared with $45.5 million as of 31st December 2003.
The total company book-to-bill ratio for the quarter was 0.97 to 1 and for the nine months ended 31st March 2004 was 1.08 to 1.
"One of our key strategies is to provide a comprehensive portfolio of high intellectual property-based products and services to our customers", said Peckham.
"As we continue to focus on providing solutions to our customers, our product line remains a key strength of the company".
"We are pleased with the design wins and increased bookings level this fiscal year.
Based on projections from our customers, we expect a favourable book-to-bill for the June quarter", continued Peckham.
"We are continuing to see improvement in our markets.
The government market is still strong with increasing requirements for system level solutions.
The communications and enterprise markets are continuing to rebound, and our customers' forecasts are more aggressive.
In the commercial market we are seeing steady demand from semiconductor and medical equipment manufacturers".
"Based on our forecasts and backlog, we expect sales for the June quarter to be between $37 million and $38 million.
By meeting this projection, our growth in sales for fiscal year 2004 would be approximately 15% over fiscal year 2003.
We are focused on our markets and will continue to concentrate on closing design wins and growing revenue and earnings", said Peckham.
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