During past 5 years sales have been growing at ~40% a year, except for a slow down in 1998. They have begun to accelerate again.
Question to the thread: Do these guys serve a regional or national clientele?
Are they well-known in SAN circles?
SUMMARY FINANCIAL DATA
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
--------------------------------------------------- -----------------
1994 1995 1996 1997 1998 1998 1999
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(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
STATEMENT OF OPERATIONS DATA:
Net sales............................. $32,333 $38,048 $54,652 $71,255 $87,952 $36,627 $55,526
Cost of sales......................... 25,907 30,356 42,872 55,719 65,740 27,644 41,263
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Gross profit.......................... 6,426 7,692 11,780 15,536 22,212 8,983 14,263
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Operating expenses:
Sales and marketing................... 1,891 2,487 3,607 5,191 7,754 3,055 5,533
General and administrative............ 1,912 2,118 2,382 3,010 5,403 1,713 3,610
Engineering........................... 343 467 633 926 1,362 691 1,390
Offering costs(1)..................... 733 173
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Total operating expenses.............. 4,146 5,072 6,622 9,127 15,252 5,459 10,706
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Operating income...................... 2,280 2,620 5,158 6,409 6,960 3,524 3,557
Interest expense, net................. 243 306 286 333 281 105 183
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Income before income taxes............ 2,037 2,314 4,872 6,076 6,679 3,419 3,374
Income tax expense (benefit).......... 148 (517)
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Net income(2)......................... $ 2,037 $ 2,314 $ 4,872 $ 6,076 $ 6,531 $ 3,419 $ 3,891
======= ======= ======= ======= ======= ======= =======
Historical net income per share, basic
and diluted......................... $ 0.30 $ 0.34 $ 0.71 $ 0.88 $ 0.93 $ 0.50 $ 0.61
======= ======= ======= ======= ======= ======= =======
Weighted average shares outstanding,
basic and diluted................... 6,900 6,900 6,900 6,900 6,993 6,900 6,361
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Pro forma income taxes(3)............. 2,672 1,333 1,417
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Pro forma net income.................. $ 3,860 $ 2,086 $ 2,474
======= ======= =======
Pro forma net income per share, basic
and diluted(4)...................... $ 0.47 $ 0.26 $ 0.33
======= ======= =======
Shares used in computing pro forma net
income per share(4)................. 8,232 8,139 7,600
======= ======= =======
AS OF JUNE 30, 1999
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PRO FORMA
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AS OF DECEMBER 31, TERMINATION TERMINATION OF
----------------------------------------------- OF PUT S CORPORATION AS
1994 1995 1996 1997 1998 ACTUAL OPTIONS(5) STATUS(6) ADJUSTED(7)
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(IN THOUSANDS) (UNAUDITED)
BALANCE SHEET DATA:
Cash.................... $ 294 $ 111 $ 222 $ 1,163 $ 2,798 $ -- $ -- $ -- $ 2,965
Working capital......... 2,424 3,003 5,330 6,761 6,677 5,049 5,049 (3,144) 14,641
Total assets............ 9,314 8,689 15,355 18,705 32,144 29,964 29,964 30,411 33,376
Note payable to former
stockholder(8)........ 3,020 3,020 3,020 3,020
Common stock, subject to
put option............ 3,425 5,351 9,339 13,874 19,059 21,419 -- -- --
Stockholders' equity
(deficiency).......... (1,331) (2,286) (3,296) (5,744) (6,341) (11,475) 9,944 842 18,627
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(1) Reflects legal, accounting and other costs associated with the Company's
initial public offering, which was postponed due to market conditions.
(2) For the periods presented, the Company was an S corporation and,
accordingly, was not subject to federal and state income taxes. Until its
merger into Datalink in January 1999, DCSI was a C corporation. Accordingly,
a provision for income taxes resulting from the operations of DCSI from the
date of the acquisition, July 15, 1998, through December 31, 1998 is
included in the financial data for the year ended December 31, 1998.
Beginning with the merger of DCSI into Datalink in January 1999, the taxable
income of DCSI is reported as part of the Company's S corporation taxable
income. Accordingly, the Company eliminated DCSI's net deferred income tax
liabilities of $580 which, net of a current income tax provision of $63,
resulted in a net income tax benefit of $517 for the six month period ended
June 30, 1999.
(3) Pro forma income taxes have been computed as if the Company was subject to
federal and state income taxes for the periods presented, based on the tax
laws in effect during those periods. See Notes 2 and 3 of the Notes to the
Company's Consolidated Financial Statements.
(4) Pro forma net income per share is computed by dividing pro forma net income
by the weighted average number of shares outstanding for the period, after
giving effect to the estimated number of shares that would be required to be
sold at the initial public offering price of $7.50 per share (before
deducting the underwriting discounts) to fund a distribution to the current
stockholders of all previously taxed, but undistributed, S Corporation
earnings, estimated at $8,640 had the termination occurred on June 30, 1999.
The Company does not have any common stock equivalents. See "Termination of
S Corporation Status and Put Option and Dividend Policy" and Note 3 of the
Notes to the Company's Consolidated Financial Statements.
(5) Adjusted to give pro forma effect to the reclassification of the Company's
Common Stock subject to put option into stockholders' equity, reflecting
termination of these put options upon the closing of this offering. See
"Termination of S Corporation Status and Put Option and Dividend Policy" and
Note 9 of the Notes to the Company's Consolidated Financial Statements.
(6) Adjusted to give pro forma effect to (i) the pro forma adjustment described
in (5) above, (ii) a final S corporation distribution payable to the current
stockholders, representing all previously taxed, but undistributed, S
corporation earnings, estimated at $8,640 had the termination occurred on
June 30, 1999 and (iii) a net deferred tax liability which will be recorded
by the Company as a result of the termination of its S corporation status,
estimated at $462 had such termination occurred on June 30, 1999. See
"Termination of S Corporation Status and Put Option and Dividend Policy" and
Note 3 of the Notes to the Company's Consolidated Financial Statements.
(7) Adjusted to give effect to (i) the pro forma adjustments described in (6)
above and (ii) the sale by the Company of 2,600 shares of Common Stock
offered hereby and the application of the estimated net proceeds therefrom.
See "Use of Proceeds" and "Capitalization." |
