SBE announces second quarter results.

SAN RAMON, Calif.--(BUSINESS WIRE)--May 24, 1995--SBE, Inc. (NASDAQ:SBEI) today reported a net loss for the second fiscal quarter ended April 30, 1995, as a result of increased marketing and development expenditures to support the Company's recently introduced netXpand product line. Developed for

the rapidly growing remote LAN access and routing markets, the first two products of the netXpand family have been well received by major distributors of networking equipment in the US as well as Asia. The Company is building a backlog for netXpand products and expects initial shipments to begin in the third fiscal quarter.

The Company recorded a loss of $1.1 million, or 54 cents per share for the second fiscal quarter ended April 30, 1995, down from net income of $544,000 or 26 cents per share, for the same period of fiscal 1994. Second quarter sales were $4.8 million, a 14 percent decline from $5.6 million for the same period last year. This decline is a result of a $1.4 million decrease in sales to Cisco Systems, which was offset in part by increased sales through our Hewlett Packard channel.

Fiscal second quarter 1995 gross margins decreased to 51 percent from 57 percent in the second quarter of the previous year, reflecting manufacturing startup expenditures for additional capacity to support netXpand product shipments. Gross margins for the Company's core VME controller business increased to 61 percent for the second quarter of fiscal 1995, from 60 percent for the same period of 1994.

For the first six months of fiscal 1995, the Company reported a net loss of $1.4 million, or 66 cents per share, down from net income of $832,000, or 40 cents per share, for the same period a year ago. Sales for the first six months of fiscal 1995 were $9.9 million, compared to $10.7 million in the first six months of fiscal 1994.

William B. Heye Jr., president and chief executive officer, noted, "The loss for the quarter is a direct result of expenditures associated with our new netXpand family of internetworking products. Our research and development costs increased 31 percent; and sales and marketing costs rose 53 percent from the second quarter of 1994. We expect these expenditures to continue at comparable levels as we ramp up production and build distribution channels for these exciting new products."

Heye continued, "Initial response to the netXpand product line has been tremendous, not only in the US but overseas as well. We are building a backlog of orders from our distribution channels. In addition, our partnership agreement with NTT-IT of Japan is propelling the Company into a strong position in the important Pacific Rim markets, a crucial element to SBE's future growth and success."

SBE, Inc., based in San Ramon, California, is a leading designer and manufacturer of VME and PC bus-based communications boards and remote internetworking devices. These products are sold through OEM and distribution channels. SBE's mission is to provide cost effective "personal networking" solutions that simplify the complexity of data communications and allow non-technical users access to remote network resources. Tel: (510) 355-2000, Fax (510) 355-2020. -0- Note to Editors: netXpand is a trademark of SBE, Inc. -0-

                           SBE, Inc.
              Condensed Statement of Earnings
           (in thousands, except per share amount)

For the quarter ended April 30              1995           1994
                                          --------       --------
Net sales                                  $4,768         $5,627
(Loss) income before taxes                 (1,516)           766
Net (loss) income                          (1,109)           544
(Loss) earnings per share                  ($0.54)         $0.26
Weighted average common shares outstanding  2,047          2,111

For the sixth months ended April 30         1995           1994
                                          --------       ---------
Net sales                                  $9,883         $10,694
(Loss) income before taxes                 (1,862)          1,189
Net (loss) income                          (1,359)            832
(Loss) earnings per share                  ($0.66)          $0.40
Weighted average common shares outstanding  2,044           2,099

CONTACT: SBE, Inc.

Timothy J. Repp, 510/355-2000