UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2001 [ ] Transition report pursuant to section 13 or 15(d) of the Securities and Exchange Act of 1934 For the transition period from _______ to ________ Commission file number 0-8419 ------ SBE, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 94-1517641 ----------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4550 Norris Canyon Road, San Ramon, California 94583 ----------------------------------------------------- (Address of principal executive offices and zip code) (925) 355-2000 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The number of shares of Registrant's Common Stock outstanding as of May 31, 2001 was 3,515,222. 1
SBE, INC. INDEX TO APRIL 30, 2001 FORM 10-Q PART I FINANCIAL INFORMATION ITEM 1 Financial Statements Condensed Consolidated Balance Sheets as of April 30, 2001 and October 31, 2000 3 Condensed Consolidated Statements of Operations for the three and six months ended April 30, 2001 and 2000 4 Condensed Consolidated Statements of Cash Flows for the six months ended April 30, 2001 and 2000 5 Notes to Condensed Consolidated Financial Statements 6 ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 ITEM 3 Quantitative and Qualitative Disclosures about Market Risk 13 PART II OTHER INFORMATION ITEM 4 Submission of Matters to a Vote of Security Holders 13 ITEM 6 Exhibits and Reports on Form 8-K 14 SIGNATURES 15 EXHIBITS 16 2
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS <TABLE> <CAPTION> SBE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) April 30, October 31, 2001 2000 ----------- ------------- <S> <C> <C> (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 6,869 $ 5,311 Trade accounts receivable, net 1,713 4,296 Inventories, net 5,090 4,918 Other 339 427 ----------- ------------- Total current assets 14,011 14,952 Property, plant and equipment, net 1,913 2,143 Capitalized software costs, net 194 293 Other 71 39 ----------- ------------- Total assets $ 16,189 $ 17,427 =========== ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 684 $ 1,094 Accrued payroll and employee benefits 275 1,304 Accrued product warranties 144 145 Accrued rent 383 -- Other accrued expenses 155 767 ----------- ------------- Total current liabilities 1,641 3,310 Refundable Deposit 4,870 -- Deferred rent and other 256 288 ----------- ------------- Total liabilities 6,767 3,598 ----------- ------------- Stockholders' equity: Common stock 13,850 13,855 Deferred stock compensation (41) (164) Treasury stock (409) (409) Note receivable from stockholder (744) (744) Retained earnings (accumulated deficit) (3,234) 1,291 ----------- ------------- Total stockholders' equity 9,422 13,829 ----------- ------------- Total liabilities and stockholders' equity $ 16,189 $ 17,427 =========== ============= </TABLE> See notes to condensed consolidated financial statements. 3
<TABLE> <CAPTION> SBE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three months ended Six months ended April 30, April 30, 2001 2000 2001 2000 -------- ------ -------- ------- <S> <C> <C> <C> <C> Net sales $ 1,813 $8,944 $ 5,231 $15,913 Cost of sales 1,523 3,110 2,902 5,333 -------- ------ -------- ------- Gross profit 290 5,834 2,329 10,580 Product research and development 1,585 1,214 3,219 2,717 Sales and marketing 768 1,245 1,572 2,450 General and administrative 815 1,372 1,799 2,442 Restructuring costs 384 -- 384 -- -------- ------ -------- ------- Total operating expenses 3,552 3,831 6,974 7,609 -------- ------ -------- ------- Operating income (loss) (3,262) 2,003 (4,645) 2,971 Interest and other income, net 50 34 120 67 -------- ------ -------- ------- Income (loss) before income taxes (3,212) 2,037 (4,525) 3,038 Provision for income taxes --- 53 --- 94 -------- ------ -------- ------- Net income (loss) $(3,212) $1,984 $(4,525) $ 2,944 ======== ====== ======== ======= Basic earnings (loss) per share $ (0.95) $ 0.64 $ (1.35) $ 0.95 ======== ====== ======== ======= Diluted earnings (loss) per share $ (0.95) $ 0.53 $ (1.35) $ 0.83 ======== ====== ======== ======= Basic - Shares used in per share computations 3,368 3,116 3,349 3,099 ======== ====== ======== ======= Diluted - Shares used in per share computations 3,368 3,717 3,349 3,547 ======== ====== ======== ======= </TABLE> See notes to condensed consolidated financial statements. 4
<TABLE> <CAPTION> SBE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six months ended April 30, ---------- 2001 2000 -------- -------- <S> <C> <C> Cash flows from operating activities: Net income (loss) $(4,525) $ 2,944 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Amortization of deferred stock compensation 14 -- Depreciation and amortization: Property and equipment 436 418 Software 109 119 Changes in operating assets and liabilities: (Increase) decrease in trade accounts receivable 2,583 (3,496) Increase in inventories (172) (1,748) Increase (decrease) in other assets 56 (71) Increase (decrease) in trade accounts payable (410) 1,093 Increase (decrease) in other current liabilities (1,259) 1,179 Increase (decrease) in non current liabilities 4,838 (31) -------- -------- Net cash provided by operating activities 1,670 407 -------- -------- Cash flows from investing activities: Purchases of property and equipment (206) (569) Capitalized software costs (10) (96) -------- -------- Net cash used in investing activities (216) (665) -------- -------- Cash flows from financing activities: Purchase of treasury stock -- (51) Proceeds from stock plans 104 302 -------- -------- Net cash provided by financing activities 104 251 -------- -------- Net increase (decrease) in cash and cash equivalents 1,558 (7) Cash and cash equivalents at beginning of period 5,311 3,385 -------- -------- Cash and cash equivalents at end of period $ 6,869 $ 3,378 ======== ======== </TABLE> See notes to condensed consolidated financial statements. 5
SBE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. INTERIM PERIOD REPORTING: These condensed consolidated financial statements of SBE, Inc. (the "Company") are unaudited and include all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations and cash flows for the interim periods. The condensed consolidated financial statements of the Company include the financial position and results of operation of LAN Media Corporation, which the Company acquired on July 14, 2000. The merger was accounted for as a pooling of interests, and accordingly, financial statements presented for all periods have been restated to reflect combined operations and financial position. The results of operations for the six months ended April 30, 2001 are not necessarily indicative of expected results for the full 2001 fiscal year. Certain information and footnote disclosures normally contained in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in the Company's Annual Report on Form 10-K for the year ended October 31, 2000. MANAGEMENT ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates and judgments made by management of the Company include matters such as collectibility of accounts receivable, realizability of inventories and recoverability of capitalized software and deferred tax assets. 2. INVENTORIES: Inventories comprise the following (in thousands): April 30, October 31, 2001 2000 ------ ------ Finished goods $ 2,476 $ 2,144 Parts and materials 2,614 2,774 ------ ------ $ 5,090 $ 4,918 ====== ====== 6
3. REFUNDABLE DEPOSIT A refundable deposit associated with a multi-year supply agreement with Compaq Computer Corporation of $4.9 million was received in April 2001. This deposit is refundable as the Company delivers certain quantities of products to Compaq over the next four years. The entire deposit has been classified as non current as the first refund is not expected to be made within the next twelve months. 4. NET EARNINGS (LOSS) PER SHARE: Basic earnings per common share for the six months ended April 30, 2001 and 2000 were computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted earnings per common share for the six months ended April 30, 2000 were computed by dividing net income by the weighted average number of shares of common stock and common stock equivalents outstanding. The following table sets forth the computation of basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share data): <TABLE> <CAPTION> Three months ended Six months ended April 30, April 30, 2001 2000 2001 2000 -------- ------ -------- ------ <S> <C> <C> <C> <C> Basic: Numerator - --------- Net income (loss) $(3,212) $1,984 $(4,525) $2,944 Denominator - ----------- Weighted average shares 3,368 3,116 3,349 3,099 -------- ------ -------- ------ Basic net income (loss) per share (.95) .64 (1.35) .95 -------- ------ -------- ------ Diluted: Numerator - --------- Net income (loss) (3,212) 1,984 (4,525) 2,944 Denominator - ----------- Weighted average shares 3,368 3,116 3,349 3,547 Shares issuable under stock options --- 601 --- 448 -------- ------ -------- ------ Diluted shares 3,368 3,717 3,349 3,547 Diluted net income (loss) per share (.95) .53 (1.35) .83 -------- ------ -------- ------ </TABLE> 7
Diluted net loss per share for the three and six month periods ended April 30, 2001 does not include the effect of 55,654 and 80,486 shares, respectively, of common stock issuable under stock options as such common stock equivalents have an antidilutive effect. 5. RESTRUCTURING COSTS: During the second fiscal quarter of 2001, the Company recorded a pre-tax restructuring charge of $384,000 in connection with the Company's consolidation and subleasing of facilities. The charge represents the estimated costs associated with the unoccupied space, net of estimated sublease revenues. The Company expects future cash expenditures related to this restructuring activity to be approximately $384,000, of which $310,000 is anticipated to be paid within the next twelve months. No cash payments were made during the quarter ended April 30, 2001 in connection with this matter. 6. CONCENTRATION OF RISK: In the three and six months ending April 30, fiscal 2001 and 2000, most of the Company's sales were attributable to sales of wireless communications products and were derived from a limited number of OEM customers. Sales to Compaq Computer Corporation accounted for 49 percent and 73 percent of net sales during the second quarter of fiscal 2001 and 2000, respectively, and 40 percent and 75 percent of the Company's net sales in the first six months of fiscal 2001 and 2000, respectively. The only other customer with sales of 10 percent or more was Lucent Technologies, with sales of 10 percent and four percent for the first six months of fiscal 2001 and 2000, respectively. Also, Compaq accounted for 46 percent and 82 percent of the Company's accounts receivable as of April 30, 2001 and April 30, 2000, respectively. The Company expects that sales to Compaq will continue to constitute a substantial portion of the Company's net sales in the remainder of fiscal 2001. A significant reduction in orders from any of the Company's OEM customers, particularly Compaq, could have a material adverse effect on the Company's business, operating results and financial condition. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements may be deemed to include information that is not historical, including without limitation, the Company's expectations regarding sales to Compaq Computer in fiscal 2001, the belief that the market for client server networking products is growing, the adequacy of anticipated sources of cash, planned capital expenditures, the effect of interest rate increases and trends or expectations regarding the Company's operations. Words such as "believes," "anticipates," "expects," "intends" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Readers are cautioned that the forward-looking statements reflect management's analysis only as of the date hereof, and the Company assumes no obligation to update these statements. Actual events or results may differ materially from the results discussed in or implied by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those risks and uncertainties discussed below under "Factors Affecting Operating Results" and elsewhere in this Quarterly Report on Form 10-Q, as well as other risks set forth under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2000. The following discussion should be read in conjunction with the Financial Statements and the Notes thereto included in Item 1 of this Quarterly Report on Form 10-Q and in the Company's Form 10-K for the fiscal year ended October 31, 2000. 8
SBE, Inc. designs, markets, sells and supports high-speed intelligent communications controller products for use in telecommunications systems worldwide. Our products enable both traditional and emerging telecommunications service providers to deliver advanced communications equipment and services, which we believe help these providers compete more effectively in today's highly competitive telecommunications service market. Our products include WAN interface adapters and high performance communications controllers that are used principally in workstations, media gateways, routers, internet access devices, home location registers and data messaging applications. Our business is characterized by a concentration of sales to a small number of OEM customers and consequently the timing of significant orders from major customers and their product cycles causes fluctuation in our operating results. Sales to Compaq Computer Corporation, our largest customer, represented 67 percent of our net sales in fiscal 2000. If any of our major customers, especially Compaq, reduces orders for our products, we could lose revenues, whereby our business, operating results and financial condition would suffer. Sales to Compaq accounted for 40 percent of our net sales in the six months ended April 30, 2001 and 75 percent for the first six months of fiscal 2000. Orders by our OEM customers are affected by factors such as new product introductions, product life cycles, inventory levels, manufacturing strategy, contract awards, competitive conditions and general economic conditions. We are attempting to diversify our sales with the introduction of new products that are targeted at large growing markets within the telecommunications industry. Our Highwire products are focused on the telecommunications applications market. We believe the growth in this market is driven by the convergence of traditional telephony applications with the Internet. We cannot assure you that we will be able to succeed in penetrating this market and diversifying our sales. RESULTS OF OPERATIONS The following table sets forth, as a percentage of net sales, consolidated statements of operations data for the three and six months ended April 30, 2001 and 2000. These operating results are not necessarily indicative of our operating results for any future period. 9
<TABLE> <CAPTION> THREE MONTHS ENDED SIX MONTHS ENDED -------------------- ------------------ APRIL 30, APRIL 30, ---------- ---------- 2001 2000 2001 2000 ------ ----- ----- ----- <S> <C> <C> <C> <C> Net sales 100% 100% 100% 100% Cost of sales 84 35 55 34 ------ ----- ----- ----- Gross profit 16 65 45 66 ------ ----- ----- ----- Product research and development 87 14 62 17 Sales and marketing 42 14 30 17 General and administrative 45 15 34 15 Restructuring costs 21 -- 7 -- ------ ----- ----- ----- Total operating expenses 196 43 133 48 ------ ----- ----- ----- Operating income (loss) (180) 22 (89) 19 Interest and other income, net 3 1 2 0 ------ ----- ----- ----- Income (loss) before income taxes (177) 23 (87) 19 Provision for income taxes -- 1 -- 0 ------ ----- ----- ----- Net income (loss) (177)% 22% (87)% 19% ====== ===== ===== ===== </TABLE> NET SALES Net sales for the second quarter of fiscal 2001 were $1.8 million, an 80 percent decrease from the second quarter of fiscal 2000. For the first six months of fiscal 2001 net sales were $5.2 million, which represented a 67 percent decrease from the same period in fiscal 2000. This decrease was primarily attributable to lower sales to Compaq of $5.7 million in the second quarter of fiscal 2001 and $9.9 million for the first six months of fiscal 2001, respectively, compared to fiscal 2000. This was in addition to a $1.4 million decrease in sales of all other product lines combined for the second quarter of fiscal 2001, and an $800,000 decrease in sales of all other product lines for the first six months of fiscal 2001, compared to fiscal 2000. Market and economic uncertainty as well as product design delays at several of our large customers also contributed to the decrease as product development cycles were pushed back to later quarters of the year. Sales to Compaq, primarily of VMEBus products, represented 49 percent of sales for the second quarter and 40 percent of sales for the first six months of fiscal 2001, while sales to Lucent Technologies represented six percent of net sales during the second quarter and 10 percent of sales for the first six months of fiscal 2001. No other customer accounted for over 10 percent of sales in the three or six month periods. We expect to continue to experience fluctuation in product sales as large customers' needs change. GROSS PROFIT Gross profit as a percentage of sales in the second quarter of fiscal 2001 was 16 percent, as compared to 65 percent during the second quarter of fiscal 2000. For the first six months of fiscal 2001 the gross profit percentage was 45 percent, as compared to 66 percent during the same period of fiscal 2000. The decrease from fiscal 2000 to fiscal 2001 was primarily attributable to higher material costs and a less favorable product mix in the fiscal 2001 period. 10
PRODUCT RESEARCH AND DEVELOPMENT Product research and development expenses were $1.6 million in the second quarter of fiscal 2001, an increase of 31 percent from $1.2 million in the second quarter of fiscal 2000, but virtually unchanged from the first quarter of fiscal 2001. For the first six months of fiscal 2001, research and development expenses were $3.2 million, an 18 percent increase from $2.7 million for the first six months of fiscal 2000. The increase in research and development spending from the fiscal 2000 period to the fiscal 2001 period was a result of accelerated spending for development of our HighWire and other new telecommunications products. We expect research and development spending to remain equal to or slightly below current levels, as additional new products are developed and as we continue to expand our product lines to meet the demands of the telecommunications marketplace. SALES AND MARKETING Sales and marketing expenses for the second quarter of fiscal 2001 were $768,000, a decrease of 38 percent from $1.2 million in the second quarter of fiscal 2000. The sales and marketing expenses for the first six months of fiscal 2001 were $1.6 million, a 36 percent decrease from $2.5 million in fiscal 2000. The decrease for fiscal 2001 was primarily due to lower marketing program spending for products already introduced during previous quarters, but not yet fully available in volume. Expenditures were closely monitored in light of current market conditions, and less than expected revenue year to date. Overall, we expect sales and marketing expenses will increase slightly from the fiscal 2000 level during fiscal 2001, as additional new products are introduced and as marketing and sales programs are expanded and/or introduced to give even greater exposure to our newer products. GENERAL AND ADMINISTRATIVE General and administrative expenses were $815,000 for the second quarter of fiscal 2001, a decrease of 41 percent from $1.4 million in the second quarter of fiscal 2000. For the first six months of fiscal 2001 general and administrative expenses were $1.4 million, a decrease of 42 percent from $2.4 million for the first six months of fiscal 2000. This decrease was due to carefully maintaining or reducing spending levels in response to lower income levels during the second quarter of fiscal 2001. In future periods, we expect that general and administrative expenses may continue to decrease from current expenditure levels as overhead levels are reduced. RESTRUCTURING COSTS Restructuring costs of $384,000 were recorded during the second fiscal quarter of 2001 related to the Company's consolidation and subleasing of facilities. The charge represented the estimated costs of facilities leases net of estimated sublease revenues. INTEREST AND OTHER INCOME, NET Net interest and other income increased to $50,000 in the second quarter of fiscal 2001 from $34,000 in the same period in fiscal 2000, an increase of 47 percent. Also, for the first six months of fiscal 2001 net interest and other income was $120,000, an increase of 79 percent from $67,000 in fiscal 2000. This increase was due to higher average cash balances and decreased debt. INCOME TAXES We did not record any benefit for taxes in the second quarter of fiscal 2001 or during the first six months of fiscal 2001 due to the uncertainty in realizing the benefit derived from our net operating losses and unused tax credits in future periods. Therefore the tax benefits related to the net operating losses and tax credits were fully reserved against. We recorded a provision for taxes in the second quarter of fiscal 2000 of $53,000. For the first six months of fiscal 2000, we recorded a provision of $94,000. In the event of future taxable income, our effective income tax rate in future periods could be lower than the statutory rate as operating loss and tax credit carryforwards are recognized. 11
NET INCOME (LOSS) As a result of the factors discussed above, we recorded a net loss of $3.2 million in the second quarter of fiscal 2001, as compared to net income of $2.0 million in the second quarter of fiscal 2000. For the first six months of fiscal 2001, the loss was $4.5 million, compared to a net income of $2.9 million for the first six months of fiscal 2000. LIQUIDITY AND CAPITAL RESOURCES At April 30, 2001, we had cash and cash equivalents of $6.9 million, as compared to $5.3 million at October 31, 2000. In the first six months of fiscal 2001, $1.7 million of cash was provided through operating activities, primarily as a result of a $2.6 million decrease in accounts receivable and a $4.8 million increase in non current liabilities, partially offset by a $4.5 million net loss, a $172,000 increase in inventories, a $410,000 decrease in trade accounts payable and a $1.3 million decrease in other current liabilities. The accounts receivable decrease was primarily a result of decreased sales. The increase in non current liabilities was the result of a $4.9 million deposit from Compaq which was part of a four-year end-of-life supply agreement that was initiated during the second quarter of fiscal 2001. Inventory increased as a result of purchases of certain end-of-life components to be used in future production of VME and LMC adapter products, offset by obsolete inventory that was written off. We believe that we have acquired sufficient components to meet backlog and forecasted customer demand, to meet near term requirements, and are actively working with the applicable customers to help them transition to new product platforms. The decrease in trade accounts payable is the result of controlled spending during the current period of decreased sales. The decrease in other current liabilities was a result of the payment of accrued sales commissions, bonuses, and company profit sharing earned in the previous fiscal year. Working capital at April 30, 2001 was $12.4 million, as compared to $11.6 million at October 31, 2000. In the first six months of fiscal 2001, the Company purchased $206,000 of fixed assets, consisting primarily of computer and engineering equipment. Software costs amounting to $10,000 were capitalized during the first six months of 2001. We expect capital expenditures will remain at current levels for the remainder of fiscal 2001. We received $104,000 in the first six months of fiscal 2001 from payments related to employee stock option exercises and purchases made by employees pursuant to our employee stock purchase plan. Based on the current operating plan, we anticipate that our current cash balances and anticipated cash flows or usage from operations will allow for us to meet our working capital needs over the next 12 months. However, in the event additional financing is required, we may not be able to raise new funds on acceptable terms, or at all. 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our cash and cash equivalents are subject to interest rate risk. We invest primarily on a short-term basis. Our financial instrument holdings at April 30, 2001 were analyzed to determine their sensitivity to interest rate changes. The fair values of these instruments were determined by net present values. In our sensitivity analysis, the same change in interest rate was used for all maturities and all other factors were held constant. If interest rates increased by 10 percent, the expected effect on net income related to our financial instruments would be immaterial. PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The annual meeting of stockholders of the Company was held on Tuesday, March 20, 2001, at the Company's corporate offices located at 4550 Norris Canyon Road, San Ramon, California. The stockholders approved the following four items: (i) The election of two directors to hold office until the 2004 Annual Meeting of Stockholders: For Against --------- ------- Raimon L. Conlisk 2,734,472 311,381 Randall L-W Caudill 2,736,257 309,596 (ii) The Company's 1996 Stock Option Plan, as amended to increase the number of of shares reserved for issuance under such plan by 150,000 shares. (For-- 722,904; Against--506,921; Abstain--3,183; Non-votes--1,812,845) (iii) Approved the Company's Non-Employee Directors' Plan (the "Directors' Plan"), as amended to change the amount of the initial discretionary grant for non-employee directors, the term and vesting schedule of options granted under the Directors' Plan and other provisions as more fully described in the proxy statement for the 2001 Annual Meeting of Stockholders. (For--807,240; Against--422,520; Abstain--3,248; Non-votes--1,812,845) (iv) The ratification of the selection of PricewaterhouseCoopers LLP as the Company's independent auditors for the fiscal year ending October 31, 2001. (For--3,041,287; Against--3,728; Abstain--838) 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) List of Exhibits: 10.1* Amendment No. S/M018-4 dated April 3, 2001, to the Purchase Agreement dated May 6, 1991, between SBE, Inc. and Compaq Computer Corporation. 11.1 Statements of Computation of Net Income (Loss) per Share. (b) Reports on Form 8-K: No report on Form 8-K was filed by the Company during the quarter ended April 30, 2001. * Certain portions have been deleted pursuant to a confidential treatment request. 14
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on June 12, 2001. SBE, INC. ---------- Registrant /s/Timothy J. Repp ------------------------------------------ Timothy J. Repp Chief Financial Officer, Vice President of Finance and Secretary (Principal Financial and Accounting Officer) 15
EXHIBIT INDEX Exhibit Description Page - ------- ----------- ---- 10.1* Amendment No. S/M018-4 dated April 3, 2001 to the 17 Purchase Agreement Dated May 6, 1991, between SBE, Inc. and Compaq Computer Corporation. 11.1 Statements of Computation of Net Income (Loss) 32 per share. * Certain portions have been deleted pursuant to a confidential treatment request. 16