I havn't had much dealings with IPO's but in looking at the value put to this company I see 210mm market capacity at $10. a share. With a net revenue of (assuming the next six months are as the last)610k. Am I right in seeing a 500 p/e? I like the outlook of the company but find it hard to justify the valuation. I value your opinion as I have followed your posts on this and other threads.
I am really looking forward to seeing the results on Wed.
</TABLE>
The following table summarizes on an as adjusted basis as of March 31, 1997
the difference between the number of shares of Common Stock purchased from the
Company (assuming the conversion of all outstanding shares of Preferred Stock
into Common Stock), the total consideration paid and the average price per
share paid by the existing stockholders and by the new investors (at an
assumed initial public offering price of $9.00 per share and before deducting
estimated underwriting discounts and commissions and estimated offering
expenses payable by the Company):
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------ ------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders.......... 18,703,651 87.2% $23,901,000 49.1% $1.28
New public investors........... 2,750,000 12.8 24,750,000 50.9 9.00
---------- ----- ----------- -----
Total........................ 21,453,651 100.0% $48,651,000 100.0%
========== ===== =========== =====
</TABLE>
The foregoing analysis assumes no exercise of the Underwriters' over-
allotment option and no exercise of stock options and a warrant outstanding at
March 31, 1997. As of March 31, 1997, there were options outstanding to
purchase a total of 2,174,470 shares of Common Stock at a weighted average
exercise price of $2.70 per share and 1,000,000 shares of Common Stock
issuable upon the exercise of the warrant outstanding as of March 31, 1997 at
an exercise price of $10.00 per share. In addition, in February 1997, the
Board of Directors adopted the 1997 Stock Plan and the 1997 Employee Stock
Purchase Plan, pursuant to which 1,000,000 and 400,000 shares, respectively,
were reserved for issuance thereunder. As of March 31, 1997, no options or
shares had been issued under any of these plans. Subsequent to March 31, 1997,
the Board of Directors granted options under the 1990 Stock Plan to purchase
an additional 83,500 shares of Common Stock at weighted average exercise price
of $8.00 per share. To the extent that any of these options or the warrant is
exercised, there will be further dilution to new public investors. See
"Capitalization," "Management--Stock Plans" and Notes 10 and 17 of Notes to
Consolidated Financial Statements.
17
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with the Company's consolidated financial statements and notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus. The consolidated
statement of operations data for the fiscal years ended September 30, 1994,
1995 and 1996 and consolidated balance sheet data as of September 30, 1995 and
1996 are derived from consolidated financial statements which have been
audited by Coopers & Lybrand L.L.P., independent auditors, included elsewhere
in this Prospectus. The consolidated statement of operations data for the
years ended September 30, 1992 and 1993 and the consolidated balance sheet
data as of September 30, 1992, 1993 and 1994 are derived from consolidated
financial statements not included in this Prospectus, which have also been
audited by Coopers & Lybrand L.L.P. The consolidated statement of operations
data for the six months ended March 31, 1996 and 1997 and the consolidated
balance sheet data as of March 31, 1997 are derived from the unaudited
consolidated financial statements included elsewhere in this Prospectus that
have been prepared on the same basis as the audited consolidated financial
statements and, in the opinion of management, contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the Company's financial position and results of operations for
such periods. Historical results are not necessarily indicative of the results
to be expected in the future and results for interim periods are not
necessarily indicative of results for the entire year.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED SEPTEMBER 30, MARCH 31,
------------------------------------------- ----------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Revenues:
Contract revenues...... $ 1,916 $ 3,371 $ 5,000 $ 7,364 $11,205 $ 5,072 $ 8,467
Royalties.............. -- -- -- -- 65 -- 2,958
------- ------- ------- ------- ------- ------- -------
Total revenues......... 1,916 3,371 5,000 7,364 11,270 5,072 11,425
------- ------- ------- ------- ------- ======= -------
Costs and expenses:
Cost of contract
revenues.............. 1,053 1,950 3,844 5,236 4,821 2,301 2,396
Research and
development........... 3,546 4,291 3,067 3,117 5,218 2,413 4,368
Sales and marketing.... 1,250 1,798 2,569 3,376 4,052 1,781 2,867
General and
administrative........ 1,814 1,294 1,717 1,688 1,747 833 1,278
------- ------- ------- ------- ------- ------- -------
Total costs and
expenses.............. 7,663 9,333 11,197 13,417 15,838 7,328 10,909
------- ------- ------- ------- ------- ------- -------
Operating income
(loss)................. (5,747) (5,962) (6,197) (6,053) (4,568) (2,256) 516
Other income (expense).. 115 (123) (81) 322 439 204 125
------- ------- ------- ------- ------- ------- -------
Income (loss) before
income taxes........... (5,632) (6,085) (6,278) (5,731) (4,129) (2,052) 641
Provision for income
taxes.................. 962 251 351 1,289 286 183 253
------- ------- ------- ------- ------- ------- -------
Net income (loss)....... $(6,594) $(6,336) $(6,629) $(7,020) $(4,415) $(2,235) $ 388
======= ======= ======= ======= ======= ======= =======
Net income (loss) per
share(1)............... $ (2.24) $ (1.44) $ (1.29) $ (1.24) $ (0.73) $ (0.37) $ 0.02
======= ======= ======= ======= ======= ======= =======
Shares used in per share
calculations(1)........ 2,945 4,394 5,124 5,665 6,088 6,047 20,083
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------------------------------------- MARCH 31,
1992 1993 1994 1995 1996 1997
------- ------- -------- -------- -------- -----------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Cash, cash equivalents
and marketable
securities............. $ 1,866 $ 2,459 $ 5,046 $ 14,150 $ 8,554 $ 10,492
Total assets............ 5,300 7,807 8,395 18,307 12,868 23,843
Total debt(2)........... 1,055 1,698 1,655 1,616 1,297 847
Stockholders' deficit... (7,061) (8,351) (10,006) (7,936) (12,144) (11,065)
</TABLE> |
