SBS Technologies, Inc. Sets Records with Strong Fourth Quarter and Fiscal 1999 Performance
Fourth Quarter Sales Increased 35% Annual Sales Exceed $100 Million
SBS Technologies, Inc. (Nasdaq: SBSE) today announced results of its fourth quarter and fiscal year ended June 30, 1999. Sales for the fourth quarter were $27.7 million, a 35% increase over the $20.6 million in sales for the fourth quarter of the prior fiscal year. Net income for the quarter was $3.5 million, compared to $2.9 million for the same quarter of the prior fiscal year, a 21% increase. Net income per share - assuming dilution, excluding an $0.08 adjustment to the company's effective tax rate, was $0.49, compared to $0.47 for the fourth quarter of fiscal 1998, and $0.57 including the adjustment. For the year ended June 30, 1999, sales increased 43%, or $31.8 million, to $106.0 million, from $74.2 million for the prior fiscal year. Net income for year ended June 30, 1999 increased 22% or $2.2 million to $12.3 million from $10.1 million for the prior fiscal year. Net income per share - assuming dilution, excluding the effects of non-recurring in-process research and development costs, foreign exchange gains, and tax rate adjustments, increased to $1.89 per share from $1.64 per share for the prior fiscal year. Earnings per share - assuming dilution and including the effects of the non-recurring items for the year ended June 30, 1999 was $1.99. "Our record performance for fiscal year 1999 demonstrates the solid foundation we have built. During the year we substantially increased our sales and net income, primarily as a result of two significant acquisitions that occurred early in the fiscal year. These acquisitions strengthened our product offerings and customer base, expanded our participation in the communications market, and substantially increased our presence in Europe," said Christopher J. Amenson, Chairman of the Board and Chief Executive Officer. "We will continue to develop our core business while we increase our participation in the communications market, which offers excellent growth opportunities for our company. Sales of SBS products into the communications market, although today a small portion of our business, more than doubled in the fourth quarter from the prior year. It is my belief that our organic growth will improve during fiscal year 2000, led by the investments in research and development, sales and marketing, and acquisitions we made during the year just ended. Based on current business conditions, I would expect our fiscal year 2000 total sales and net income per share - assuming dilution, to increase between 12% and 24% over fiscal year 1999, excluding the non-recurring items and future acquisitions," continued Amenson. Review by Segment The Computer Group is the segment of the company that develops, manufactures and markets the company's processor boards, modular I/O boards, computer connectivity and expansion units, and industrial computer systems. Its principal customers serve the communications, industrial automation and control, and military systems industries. Sales for the products that comprise the SBS Computer Group increased from $45.0 million in fiscal 1998 to approximately $64.0 million in fiscal year 1999. This growth was a result of a substantial increase in sales of processor boards associated with the acquisitions made early in the year, and an increase in sales of industrial computer systems and computer expansion units. An 8% reduction in modular I/O product sales, caused by softness in new orders early in the fiscal year, held organic sales growth for the Computer Group for fiscal year 1999 to 2%. The company expects the sales from modular I/O products to improve in fiscal year 2000. For the fiscal year just ended, the Computer Group achieved twenty-two design wins, which is defined as an order received by the company for which it expects to realize $500,000 or more in sales over the ensuing twelve months. Of these design wins, six were in communications, eight were in industrial, and eight were in military markets. The Aerospace Group is the segment of the company that develops, manufactures and markets avionics interfaces utilized for military aircraft and satellite development and test, and products sold for telemetry ground stations, principally serving the satellite market. Organic growth for the Aerospace Group was approximately 9% during fiscal year 1999 over the prior fiscal year, with modest growth in sales from avionics interfaces, and better than 20% growth in sales from telemetry products. The European Group is the segment that was formed in July 1998 with the acquisition of SBS-or Industrial Computers GmbH, based in Augsburg, Germany. The European Group provides a substantial expansion of the company's Intel-based processor product line, sold in both the U.S. and Europe. The principal current markets for the European Group's products are operational military and space systems, as well as industrial automation and control. The European Group provides a platform upon which the company is building a customer development and service center for all of its products in Europe. European Group sales were approximately $14.0 million in fiscal year 1999, $3.5 million of which was sold to and is also reflected in the sales of the Computer Group. SBS Technologies, Inc. (NASDAQ: SBSE) is a leading manufacturer of embedded computer components and systems used in a variety of applications, such as communications, medical imaging, industrial control, and flight instrumentation. The company markets its products to original equipment manufacturers (OEMs) and large commercial and defense end-users through a worldwide direct sales force, global channels, and an extensive service and support network. Additional information about SBS Technologies and its products is available through the company's web site at www.sbs.com. In addition to statements of historical fact, this news release contains several forward-looking statements about sales and income growth, implied customer acceptance of all SBS products, anticipated growth in the markets served by SBS, and overall company performance. These statements reflect Management's beliefs and current expectations of the future operating performance of the company, and are based on an assessment of current market conditions and business environment. However, no forward-looking statement can be guaranteed and actual future results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, changes in general business and economic conditions; changes in business conditions and growth or slowdown in the communications, defense electronics, and commercial electronics industries, both domestic and international; fluctuations in demand for the company's products; the timely development and introduction of new products by the company; the impact of competitive products and pricing, and the other risks detailed in the company's SEC reports, including SBS' Form 10-K for the year ended June 30, 1998.