Digging throught the 10Q
sec.gov
Some negatives
SG&A went from 10M to 16M y2y or 60%, company grew 27%.
Note: The remainder of the increase was primarily due to increased personnel to support the expected sales levels for
the FC/9000, spending related to additional marketing and e-commerce initiatives and hiring additional key management.
Basic EPS went from 0.18 Sep 99 to (0.01)Sep00
Net income was $6.8M from $19.3M y2y
Write-off of acquired in-process technology 10.0M vs. zero a year ago
Note: The purchase price of Varcom was $25.0 million, which includes a non-interest bearing seller note of $1.5 million due August 2002. As a result of the Varcom acquisition, we
recorded a $10.0 million write-off of in-process technology. the Company used $55.7 million of the net proceeds to repay the principal and interest due on each of three loans made to the Company by its parent, SPX, in funding the
Company's acquisitions of TCS and STI, two European systems integration businesses, Varcom, a provider of advanced network monitoring and management tools, and Computerm, a provider of storage area network channel extension products. The Company, in connection with these acquisitions, had borrowed $54.9 million from SPX at the prime rate plus one-half percent.
Cash paid for business acquired, net of cash acquired (54.8M) vs. none a year ago
Note: Approx 25M for Varicom and 30M for Computerm.
Loan made to SPX (57.5M) vs. none a year ago
Note: INRG loaned the remaining $59.0 million to SPX,
under a demand note, for use in the daily cash management program administered by SPX. At September 30, 2000, the balance due from SPX under the demand note was $57.5 million. Interest accrues quarterly on this note at 8 1/2% through October 1, 2000. After October 1, 2000, interest on the loan will be adjusted quarterly and will accrue at the weighted average rate of interest paid by SPX for revolving loans under its credit agreement for the prior quarter. The loan to SPX is unsecured and SPX's ability to repay the amount due will be subject to SPX's financial condition and liquidity, including its ability to borrow under its credit agreement or otherwise. The loan agreement will terminate when SPX owns less than 50% of our outstanding shares of Class A common stock and Class B common stock or if there is an event of default under SPX's credit agreement.
SPX is not obligated to retain its shares of our Class A common stock, except that, subject to limited exceptions, it has agreed not to sell or otherwise dispose of any shares of our Class A common stock for 180 days after the completion of this offering without the written consent of the underwriters.
The underwriters subsequently exercised their option to purchase 1,155,000 additional shares of the Company's Class B common stock at $16.00 per share and closed on the purchase of all 8,855,000 shares on September 27, 2000.
Note: These underwriters may have dumped it.
Some positives
Net proceeds from initial public offering 128.2M vs. none
CASH AND EQUIVALENTS AT END OF PERIOD $20.1M vs. $2.5M y2y
Sales of our open storage networking products were $14.1 million, an increase of $8.4 million, or 147.4%, from $5.7 million in the three-month period ended September 30, 1999.
Notes from SPX's 10Q
sec.gov
The Company continually reviews each of its businesses pursuant to its "fix, sell or grow" strategy.
The Company owns 75,633,333 shares of Inrange class A common stock. Holders of class B common stock generally have identical rights as Class A common stock except for voting and conversion rights. The holders of Class A common stock are entitled to five votes per share and the holders of Class B common stock are entitled to one vote per share.
It appears that five managers are drawing double compensation from INRG and SPX. Also I see SPX selling off INRG shares if they get too high. $13-16 seems to be a trading range for this until nonperforming assets in INRG mature and wither.
A nagging question is this 50M loan to its parent. Can't find the use other than SPX appears to being emulating CMGI's stragety of internet incubators with its fix or sell policy.
Lockup dumping 180 days after IPO could keep it down even with a great quarter.
Jack - no position either way |
