8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 20, 2007

SIMPLETECH, INC.

(Exact name of registrant as specified in charter)

California	000-31623	33-0399154
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3001 Daimler Street, Santa Ana, California	92705-5812
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (949) 476-1180

(Former Name or Former Address, if Changed Since Last Report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. Results of Operations and Financial Condition.

On February 20, 2007, SimpleTech, Inc. (the “Company”) reported its financial results for the fourth quarter and year ended December 31, 2006. A copy of the press release issued by the Registrant on February 20, 2007 concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

See the disclosures under Item 7.01 regarding the Company’s unaudited pro forma financial statements, which are incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, unless the Registrant specifically incorporates the foregoing information into those documents by reference.

ITEM 7.01. Regulation FD Disclosure.

On February 12, 2007, SimpleTech, Inc. (the “Company”) filed a Current Report on Form 8-K, as amended by that certain Current Report on Form 8-K/A filed on February 15, 2007, that disclosed, among other things, the consummation by the Company of the sale of assets of its Consumer Division. In connection therewith, and pursuant to the requirements of Item 9.01(b) of Form 8-K, the Company filed unaudited pro forma balance sheet as of September 30, 2006, unaudited pro forma statements of operations for the nine months ended September 30, 2006 and 2005 and the fiscal years ended December 31, 2005, 2004 and 2003, each giving effect to the sale of the Consumer Division assets.

To assist investors to better understand the impact of the sale of the assets of the Consumer Division, the Company is voluntarily furnishing additional unaudited pro forma financial statements, attached hereto as Exhibit 99.2, that give effect to the sale of the assets of the Consumer Division. The unaudited pro forma consolidated statements of operations furnished herewith are presented for illustrative purposes only. The unaudited pro forma statements of operations for the three months ended March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006 have been prepared assuming that the sale of the Consumer Division assets occurred as of the beginning of each such periods and are not necessarily indicative of the results of operations for future periods or the results that actually would have been realized if the Consumer Division assets had been sold as of such dates. The pro forma financial statements are based on certain assumptions and adjustments described in the notes to the pro forma financial statements and should be read in conjunction with the financial statements and related notes contained in the Company’s Forms 10-Q for the quarters ended March 31, 2006, June 30, 2006, September 30, 2006 and Form 10-K for the year ended December 31, 2006 that the Company anticipates filing by March 31, 2007.

The information furnished under Item 7.01 of this Current Report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed

incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, unless the Company specifically incorporates the foregoing information into those documents by reference.

ITEM 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description of Exhibit
99.1	Press Release of SimpleTech, Inc., dated February 20, 2007, reporting its financial results for the fourth quarter and year ended December 31, 2006 (furnished and not filed herewith solely pursuant to Item 2.02).
99.2	Unaudited Pro Forma Statements of Operations of SimpleTech, Inc. for the Three Months Ended March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006 (furnished and not filed herewith solely pursuant to Item 7.01).

SIGNATURE

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.

	SimpleTech, Inc.
Date: February 20, 2007	By:	/s/ Dan Moses
		Dan Moses
		Chief Financial Officer and Executive Vice President

Exhibit Index

Exhibit Number	Description of Exhibit
99.1	Press Release of SimpleTech, Inc., dated February 20, 2007, reporting its financial results for the fourth quarter and year ended December 31, 2006 (furnished and not filed herewith solely pursuant to Item 2.02).
99.2	Unaudited Pro Forma Statements of Operations of SimpleTech, Inc. for the Three Months Ended March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006 (furnished and not filed herewith solely pursuant to Item 7.01)

EX-99.1

Exhibit 99.1

Media Contact:	Investors and Financial Media
Patrick Wilkinson	Contact:
Vice President, Marketing and	Mitch Gellman
Business Development	Director, Investor Relations
(949) 476-118 0	(949) 260-8328
pwilkinson@stec-inc.com	ir@stec-inc.com

STEC Announces Fourth Quarter and Full-Year 2006 Results

Annual Revenue Up 34% to a Record of $352 Million; Q4 EPS Increases to a Quarterly Record of $0.19

SANTA ANA, Calif., February 20, 2007 — STEC (Nasdaq:STEC), which is changing its name from SimpleTech, Inc., announced today its financial results for the quarter and full-year ended December 31, 2006. The company achieved significant growth and margin expansion due primarily to the continuing expansion of its OEM Division which customizes Flash memory and DRAM solutions for leading OEMs.

Revenue for the fourth quarter of 2006 was $114.3 million, an increase of 81% from $63.3 million for the fourth quarter of 2005, and an increase of 23% from $92.8 million for the third quarter of 2006. Gross profit margin was 24.7% for the fourth quarter of 2006, compared to 18.1% for the fourth quarter of 2005, and 25.1% for the third quarter of 2006. Diluted earnings per share was $0.19 for the fourth quarter of 2006, compared to diluted earnings per share of $0.02 for the fourth quarter of 2005, and $0.14 for the third quarter of 2006.

Full-year 2006 revenue was $352.1 million, an increase of 34% from $262.0 million for 2005. Gross profit margin was 23.8% for 2006, compared to 18.7% for 2005. Full-year 2006 diluted earnings per share was $0.45, compared to full-year 2005 diluted earnings per share of $0.12.

Sale of Consumer Division; OEM Division 2006 highlights

On February 9, 2007, the company announced the divestiture of its lower-margin Consumer Division for $43 million, enabling management to focus its time and resources on advancing the company’s intellectual property portfolio and growing its high-margin OEM business. In reports on Form 8-K filed with the SEC earlier today and on February 12, 2007 (as amended on February 15, 2007), the company reported unaudited pro forma consolidated statements of operations for the quarters ended March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006, and the year ended December 31, 2005, that reflect the sale of assets of the Consumer Division as if it had occurred as of the beginning of each period presented.

Based on these statements, the OEM business achieved the following pro forma performance in 2006 compared to 2005:

• Revenue grew 68% from $128.3 million in 2005 to $215.8 million in 2006

• Flash revenue increased 144% from $37.6 million in 2005 to $91.7 million in 2006

• Gross profit margin increased from 24.2% in 2005 to 31.8% in 2006

• Operating margin expanded from 2.5% in 2005 to 14.6% in 2006

• Diluted EPS increased from $0.09 in 2005 to $0.44 in 2006

Business Outlook

“I am very pleased with our record performances both for the fourth quarter of 2006 and for the full-year,” said Manouch Moshayedi, chairman and CEO of STEC. “This growth and the profitability that we achieved in 2006 establish a fantastic platform for us as we begin 2007.

“As a result of the divestiture of our Consumer Division, STEC is a pure play Flash memory and DRAM solutions provider to OEMs. We expect to continue to build on the momentum of 2006 and will focus in 2007 on expanding our leadership position in our markets.

“As a part of our longer-term strategy, we are in the process of hiring engineers, management and staff for our interim production facility in Penang, Malaysia and have broken ground on our much larger permanent facility in Penang, which we expect will be in operation in the first quarter of 2008. The Malaysia operation is expected to reduce our overall corporate effective tax rate in the future, reduce incremental engineering and manufacturing labor costs, and extend our reach to OEM customers in the Far East.

“We currently expect our revenue for the first quarter of 2007 to range from $43 million to $47 million, our gross margins to range from 32% to 34%, our effective tax rate to approximate 38% and our diluted earnings per share to range from $0.06 to $0.08.”

Conference Call

STEC will hold an open conference call to discuss results for the fourth quarter and full-year 2006. The call will take place today at 1:30 p.m., Pacific/4:30 p.m., Eastern. The call-in numbers for the conference are 1-800-781-3662 (United States and Canada) and 1-706-643-7710 (International).

Webcast

This call is being webcast. The webcast can be accessed by clicking on “Investors” at the bottom of the home page at www.stec-inc.com. The webcast will be archived and available for replay beginning approximately two hours after the live call concludes.

About STEC Inc. (Nasdaq:STEC)

STEC, which is changing its name from SimpleTech, Inc., designs, develops, manufactures and markets custom memory solutions based on Flash memory and DRAM technologies. The company has announced that it intends to change its corporate legal name from SimpleTech, Inc. to STEC, Inc. Although the legal name of the company will continue to be SimpleTech, Inc. until the name change process has been completed, for marketing and branding purposes the company has begun referring to itself as STEC. For information about STEC and to subscribe to the company’s “Email Alert” service, please visit our web site at www.stec-inc.com, click “Investors” and then “Email Alert.”

The STEC logo is available at: http://www.primezone.com/newsroom/prs/?pkgid=1079

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

This press release contains forward-looking statements that involve risks and uncertainties, including, but not limited to, statements concerning the continuing emergence of our OEM Division, the growth and profitability achieved in 2006 establishing a fantastic platform for us in 2007, expectation of continuing to build on the platform of performance established in 2006 and focus on expanding leadership position in the OEM Flash market, belief we can leverage our intellectual property portfolio to build on our 2006 performance, hiring employees for our temporary production facility in Penang, Malaysia, expected completion date of our manufacturing in Penang, Malaysia, expected impact of our Malaysia operations on our overall corporate effective tax rate, labor costs and reach to OEM customers in the Far East, revenue, gross margins, operating margin, effective tax rate, and diluted earnings per share guidance for the first quarter of 2007. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and

could cause actual outcomes and results to differ materially from current expectations. Important factors which could cause actual results to differ materially from those expressed or implied in the forward-looking statements are detailed under “Risk Factors” in filings with the Securities and Exchange Commission made from time to time by the company, including its Annual Report on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K. Other factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements include the following risks: we may not realize the expected benefits of the divestiture of the Consumer Division; disruptions from the Consumer Division transaction could make it more difficult to maintain relationships with customers and employees; changes in demand from certain customer segments; the cost of raw materials may fluctuate widely in the future,; our backlog may not result in future revenue; excess inventory held by our customers may reduce future demand for our products; we may not realized the expected benefits from our operations in Malaysia; unexpected delays in or increased cost associated with the construction of our Penang, Malaysia product facility; unexpected delays in the qualification process of our products with customers,; our growth initiatives may not be successfully implemented,; slower than expected expansion of our international business; we may not realize the anticipated benefits from any acquisitions of businesses, technologies, or assets we have and may undertake in the future; excess availability of DRAM or Flash memory could reduce component pricing resulting in lower average selling prices and gross profit; DRAM or Flash memory supply may tighten requiring suppliers to place their customers, including us, on limited component allocation; interruptions or delays at the semiconductor manufacturing facilities that supply components to us; higher than expected operating expenses,; new and changing technologies limiting the applications of our products,; our inability to become more competitive in new and existing markets, our inability to maintain and increase market share, difficulty competing in sectors characterized by aggressive pricing and low margins; new customer and supplier relationships may not be implemented successfully.; higher than anticipated capital equipment expenditures; adverse global economic and geo-political conditions, including acts of terror, business interruption due to earthquakes, hurricanes, pandemics, power outages or other natural disasters; and potential impact of high energy prices and other global events outside of our control which could adversely impact customer confidence and hence reduce demand for our products. The information contained in this press release is a statement of STEC’s present intention, belief or expectation. STEC may change its intention, belief or expectation, at any time and without notice, based upon any changes in such factors, in STEC’s assumptions or otherwise. STEC undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.

SimpleTech, Inc.

Consolidated Balance Sheets

(in thousands)

(unaudited)

	December 31 2006		December 31, 2005
ASSETS:
Current Assets:
Cash, cash equivalents and marketable securities	$	40,907	$	60,006
Accounts receivable, net of allowances of $ 3,127 at December 31, 2006 and $878 at December 31, 2005		68,726		38,630
Inventory, net		75,430		37,108
Deferred income taxes		2,535		1,410
Other current assets		1,691		3,825
Total current assets		189,289		140,979
Furniture, fixtures and equipment, net		11,864		8,231
Intangible assets		1,439		1,036
Goodwill		1,682		733
Other long-term assets		423		1,647
Deferred income taxes		1,959		2,515
Total assets	$	206,656	$	155,141
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable	$	28,546	$	20,564
Accrued and other liabilities		12,096		7,195
Total liabilities		40,642		27,759
Shareholders' Equity:
Common stock		49		45
Additional paid-in capital		128,353		111,576
Retained earnings		37,612		15,761
Total shareholders' equity		166,014		127,382
Total liabilities and shareholders' equity	$	206,656	$	155,141

SimpleTech, Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended December 31,					Year Ended December 31,
	2006		2005			2006		2005
Net revenues	$	114,315	$	63,251		$	352,110	$	261,988
Cost of revenues		86,081		51,833			268,178		212,887
Gross profit		28,234		11,418			83,932		49,101
Sales and marketing		7,636		6,429			27,818		24,179
General and administrative		2,989		3,245			13,271		12,705
Research and development		3,403		1,851			10,211		6,560
Total operating expenses		14,028		11,525			51,300		43,444
Operating income (loss)		14,206		(107	)		32,632		5,657
Interest income and other		350		409			1,728		1,629
Income before provision for income taxes		14,556		302			34,360		7,286
Provision (benefit) for income taxes		5,077		(461	)		12,509		1,713
Net income	$	9,479	$	763		$	21,851	$	5,573
Net income per share:
Basic	$	0.20	$	0.02		$	0.47	$	0.12
Diluted	$	0.19	$	0.02		$	0.45	$	0.12
Shares used in net income per share computation:
Basic		47,915		44,998			46,313		45,243
Diluted		50,900		46,239			48,354		46,625

EX-99.2

Exhibit 99.2

SimpleTech, Inc.

Pro Forma Financial Information

(Unaudited)

Introduction

On February 9, 2007, SimpleTech, Inc. (the “Company”) completed the sale of assets of its Consumer Division to Fabrik, Inc. for approximately $43 million. The following Unaudited Pro Forma Consolidated Statements of Operations have been prepared to illustrate the effect of the sale of assets of the Consumer Division, as a discontinued operation, on the historical financial results of operations of the Company.

The Unaudited Pro Forma Consolidated Statements of Operations for the three months ended March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006, reflect the sale of assets of the Consumer Division that occurred on February 9, 2007, as if it had occurred as of the beginning of each of the periods presented.

The Unaudited Pro Forma Consolidated Statements of Operations are based upon available information and assumptions that the Company believes are reasonable under the circumstances. The Unaudited Pro Forma Consolidated Statements of Operations have been provided for information purposes and are not necessarily indicative of the financial condition or results of operations that would have been achieved had the sale of assets of the Consumer Division occurred on the date indicated. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the Unaudited Pro Forma Consolidated Statements of Operations. The Unaudited Pro Forma Consolidated Statements of Operations, including the notes thereto, should be read in conjunction with the historical financial statements of the Company included in its Quarterly Report on Form 10-Q for the three months ended March 31, 2006, June 30, 2006 and September 30, 2006 and the Consolidated Statement of Operations included in the Company’s December 31, 2006 earnings release included in this Form 8-K filing.

The results of the sale of the Consumer Division assets will be accounted for as a discontinued operation in the first quarter of 2007, in accordance with Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” when the Company issues its financial statements for the first period that ends after completing the sale of assets of the Consumer Division.

SimpleTech, Inc.

Pro Forma Consolidated Statement of Income

For the Three Months Ended March 31, 2006

(Unaudited)

(in thousands, except per share data)

	Historical SimpleTech, Inc. (1)		Sale of Consumer Division Assets (2)			Pro Forma SimpleTech, Inc.
Net revenues	$	65,491	$	25,058		$	40,433
Cost of revenues		52,819		21,555			31,264
Gross profit		12,672		3,503			9,169
Operating expenses:
Sales and marketing		5,886		2,878			3,008
General and administrative		3,643		730			2,913
Research and development		2,048		28			2,020
Total operating expenses		11,577		3,636			7,941
Operating income (loss)		1,095		(133	)		1,228
Interest income and other		475					475
Income (loss) before provision for income taxes		1,570		(133	)		1,703
Provision (benefit) for income taxes		529		(53	) (3)		582
Net income (loss)	$	1,041	$	(80	)	$	1,121
Net income per share:
Basic	$	0.02				$	0.02
Diluted	$	0.02				$	0.02
Shares used in net income computation:
Basic		45,149					45,149
Diluted		46,207					46,207

See accompanying notes to the unaudited pro forma consolidated statements of operations.

SimpleTech, Inc.

Pro Forma Consolidated Statement of Income

For the Three Months Ended June 30, 2006

(Unaudited)

(in thousands, except per share data)

	Historical SimpleTech, Inc. (1)		Sale of Consumer Division Assets (2)			Pro Forma SimpleTech, Inc.
Net revenues	$	79,519	$	32,238		$	47,281
Cost of revenues		59,815		28,077			31,738
Gross profit		19,704		4,161			15,543
Operating expenses:
Sales and marketing		7,159		3,140			4,019
General and administrative		3,590		550			3,040
Research and development		2,217		36			2,181
Total operating expenses		12,966		3,726			9,240
Operating income		6,738		435			6,303
Interest income and other		506					506
Income before provision for income taxes		7,244		435			6,809
Provision for income taxes		2,725		175	(3)		2,550
Net income	$	4,519	$	260		$	4,259
Net income per share:
Basic	$	0.10				$	0.09
Diluted	$	0.10				$	0.09
Shares used in net income computation:
Basic		45,699					45,699
Diluted		46,379					46,379

See accompanying notes to the unaudited pro forma consolidated statements of operations.

SimpleTech, Inc.

Pro Forma Consolidated Statement of Income

For the Three Months Ended September 30, 2006

(Unaudited)

(in thousands, except per share data)

	Historical SimpleTech, Inc. (1)		Sale of Consumer Division Assets (2)			Pro Forma SimpleTech, Inc.
Net revenues	$	92,785	$	39,030		$	53,755
Cost of revenues		69,463		34,278			35,185
Gross profit		23,322		4,752			18,570
Operating expenses:
Sales and marketing		7,137		2,736			4,401
General and administrative		3,049		609			2,440
Research and development		2,543		38			2,505
Total operating expenses		12,729		3,383			9,346
Operating income		10,593		1,369			9,224
Interest income and other		397					397
Income before provision for income taxes		10,990		1,369			9,621
Provision for income taxes		4,178		553	(3)		3,625
Net income	$	6,812	$	816		$	5,996
Net income per share:
Basic	$	0.15				$	0.13
Diluted	$	0.14				$	0.12
Shares used in net income computation:
Basic		46,456					46,456
Diluted		48,489					48,489

See accompanying notes to the unaudited pro forma consolidated statements of operations.

SimpleTech, Inc.

Pro Forma Consolidated Statement of Income

For the Three Months Ended December 31, 2006

(Unaudited)

(in thousands, except per share data)

	Historical SimpleTech, Inc.(1)		Sale of Consumer Division Assets (2)			Pro Forma SimpleTech, Inc.
Net revenues	$	114,315	$	40,031		$	74,284
Cost of revenues		86,081		36,967			49,114
Gross profit		28,234		3,064			25,170
Operating expenses:
Sales and marketing		7,636		2,998			4,638
General and administrative		2,989		596			2,393
Research and development		3,403		38			3,365
Total operating expenses		14,028		3,632			10,396
Operating income (loss)		14,206		(568	)		14,774
Interest income and other		350					350
Income (loss) before provision (benefit) for income taxes		14,556		(568	)		15,124
Provision (benefit) for income taxes		5,077		(237	)		5,314
Net income (loss)	$	9,479	$	(331	)	$	9,810
Net income (loss) per share:
Basic	$	0.20				$	0.20
Diluted	$	0.19				$	0.19
Shares used in net income (loss) computation:
Basic		47,915					47,915
Diluted		50,900					50,900

See accompanying notes to the unaudited pro forma consolidated statements of operations.

SimpleTech, Inc.

Notes to the Pro Forma Consolidated Statements of Operations

(Unaudited)

1) Represents the Consolidated Statements of Operations included in the Company’s Quarterly Report on Form 10-Q for the three months ended March, 31, 2006, June 30, 2006 and September 30, 2006, and the Consolidated Statement of Operations included in the Company’s December 31, 2006 earnings release.

2) Represents adjustments to eliminate the results of operations of the Consumer Division that the Company believes are directly attributable to the sale of Consumer Division assets, factually supportable and will not continue after the sale.

3) Represents tax provision allocated to discontinued operations after the allocation to continuing operations.