September 07, 1999 20:24
JUNIPER NETWORKS INC amends common stock offering. 5 mil shares.
Excerpted from S-1/A filed on 09/07 by JUNIPER NETWORKS INC:
JUNIPER NETWORKS INC amends common stock offering. 5 mil shares.
SUBJECT TO COMPLETION. DATED SEPTEMBER 7, 1999.
5,000,000 Shares
[Juniper logo]
Common Stock
Juniper Networks, Inc. is offering 1,500,000 of the shares to be sold in
the offering. The selling stockholders identified in this prospectus are
offering an additional 3,500,000 shares. Juniper Networks will not receive any
of the proceeds from the sale of shares being sold by the selling stockholders.
The common stock is quoted on the Nasdaq National Market under the symbol
"JNPR". The last reported sale price of the common stock on September 3, 1999
was $193.25 per share.
See "Risk Factors" beginning on page 6 to read about the certain factors
you should consider before buying shares of the common stock.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
TABLE
CAPTION
Per Share Total
S C C
Initial price to public..................................... $193.25 $966,250,000
Underwriting discount....................................... $ 6.76 $ 33,800,000
Proceeds, before expenses, to Juniper Networks.............. $186.49 $279,735,000
Proceeds, before expenses, to the selling stockholders...... $186.49 $652,715,000
TABLE
To the extent the underwriters sell more than 5,000,000 shares of common
stock, the underwriters have the option to purchase up to an additional 272,564
shares from Juniper Networks and 477,436 shares from selling stockholders at the
initial price to public less the underwriting discount.
The underwriters expect to deliver the shares against payment in New York,
New York on , 1999.
GOLDMAN, SACHS & CO.
CREDIT SUISSE FIRST BOSTON
BANCBOSTON ROBERTSON STEPHENS
DAIN RAUSCHER WESSELS
A DIVISION OF DAIN
RAUSCHER INCORPORATED
SG COWEN
WARBURG DILLON READ LLC
Prospectus dated September 7, 1999.
[Inside Cover Art]
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information regarding Juniper Networks, the common stock being sold in this
offering and our consolidated financial statements, including the notes to those
statements, appearing elsewhere in this prospectus. Unless otherwise indicated,
this prospectus assumes that the underwriters' option to purchase additional
shares in the offering will not be exercised.
JUNIPER NETWORKS
We are a leading provider of Internet infrastructure solutions that enable
Internet service providers and other telecommunications service providers to
meet the demands resulting from the rapid growth of the Internet. We deliver
next generation Internet backbone routers that are specifically designed, or
purpose-built, for service provider networks and offer our customers increased
reliability, performance, scalability, interoperability and flexibility, and
reduced complexity and cost compared to current alternatives. Our flagship
product is the M40 Internet backbone router. The M40 combines the features of
our JUNOS Internet Software, high performance ASIC-based (application specific
integrated circuit) packet forwarding technology and Internet optimized
architecture into a purpose-built solution for service providers. Unlike
conventional routers, which were originally developed for enterprise
applications and are increasingly inadequate for service provider use in public
networks, our Internet backbone routers are specifically designed to accommodate
the size and scope of the Internet.
We sell our Internet backbone routers primarily through a direct sales
force and an original equipment manufacturer. Our M40 Internet backbone router
is currently used by several of the world's leading service providers, such as
UUNet, an MCI WorldCom Company, Cable & Wireless USA, AT&T/IBM Global Services,
Frontier GlobalCenter Inc. and Verio Inc.
We believe that the Internet will continue to grow at significant rates
and will evolve into the next generation public network, superseding and
expanding upon many of the functions provided by the traditional telephone
network. This trend will drive the need for new Internet infrastructure
equipment that can deliver the high levels of reliability and scalability needed
in a public network. We believe we have developed the first commercially
available Internet backbone routing platform specifically designed and built to
meet these requirements. Ryan Hankin Kent, an industry research firm, estimates
that the market for Internet backbone routers was $169 million in 1998 and is
expected to increase to approximately $5.5 billion in 2003.
Our objective is to become the primary supplier of high performance
Internet backbone infrastructure equipment. The following are key elements of
our strategy:
- leverage our early lead as supplier of purpose-built Internet infrastructure
equipment;
- work closely with our key customers;
- increase our penetration in major service providers;
- leverage our early successes to rapidly penetrate new customers;
- expand our sales and distribution network;
- maintain and extend our technology leadership; and
- enable new IP-based services.
Our principal executive offices are located at 385 Ravendale Drive,
Mountain View, California 94043, and our telephone number is (650) 526-8000.
Juniper Networks is a registered trademark and the Juniper Networks logo and M40
are trademarks of Juniper Networks. Each trademark, trade name or service mark
of any other company appearing in this prospectus belongs to its holder.
Information contained on our website, www.juniper.net, does not constitute part
of
the prospectus. We were incorporated in the State of California in February
1996, and we reincorporated in the State of Delaware in March 1998.
THE OFFERING
The following information assumes that the underwriters do not exercise the
option granted by us and the selling stockholders listed on page 61 under the
caption "Principal and Selling Stockholders" to purchase additional shares in
this offering. See "Underwriting."
TABLE
S C
Shares offered by Juniper Networks...................... 1,500,000
Shares offered by the selling stockholders.............. 3,500,000
Shares to be outstanding after the offering(1).......... 51,277,014
Use of proceeds......................................... For general corporate purposes, principally
working capital and capital expenditures.
Nasdaq National Market symbol........................... "JNPR"
TABLE
(1) Based on shares outstanding as of June 30, 1999. It excludes:
- 8,181,683 shares of common stock reserved for issuance under our Amended
1996 Stock Plan, of which 5,007,695 shares were subject to outstanding
options at a weighted average exercise price of $10.59 per share, and
3,173,988 shares were available for future grants;
- 240,410 shares of common stock issuable upon exercise of outstanding
warrants at a weighted average exercise price of $1.71 per share; and
- 500,000 shares available for issuance under our 1999 Employee Stock Purchase
Plan. See "Capitalization," "Management -- Incentive Stock Plans,"
"Description of Capital Stock" and Notes 5, 6 and 10 to the Consolidated
Financial Statements.
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS)
TABLE
CAPTION
PERIOD FROM SIX MONTHS
INCEPTION YEAR ENDED ENDED
(FEBRUARY 2, 1996) DECEMBER 31, JUNE 30,
TO DECEMBER 31, ------------------- --------------------
1996 1997 1998 1998 1999
(UNAUDITED)
S C C C C C
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net revenues................ $ -- $ -- $ 3,807 $ -- $ 27,600
Operating loss.............. (1,939) (11,598) (32,270) (12,052) (10,965)
Net loss.................... (1,799) (10,363) (30,971) (11,108) (10,527)
TABLE
TABLE
CAPTION
JUNE 30, 1999
(End of Item Excerpt)
(End of Item Excerpt)
(End of Item Excerpt)
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS)
PERIOD FROM SIX MONTHS
INCEPTION YEAR ENDED ENDED
(FEBRUARY 2, 1996) DECEMBER 31, JUNE 30,
TO DECEMBER 31, ------------------- --------------------
1996 1997 1998 1998 1999
(UNAUDITED)
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net revenues................ $ -- $ -- $ 3,807 $ -- $ 27,600
Operating loss.............. (1,939) (11,598) (32,270) (12,052) (10,965)
Net loss.................... (1,799) (10,363) (30,971) (11,108) (10,527)
(End of item excerpt.)
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our consolidated financial statements and the
related notes included elsewhere in this prospectus. The consolidated statement
of operations data set forth below for the period from February 2, 1996
(inception) to December 31, 1996, and for the fiscal years ended December 31,
1997 and 1998, and the consolidated balance sheet data as of December 31, 1997
and 1998 have been derived from the audited consolidated financial statements of
Juniper Networks, Inc. included elsewhere in this prospectus, which have been
audited by Ernst & Young LLP, Independent Auditors. The consolidated balance
sheet data at December 31, 1996 are derived from unaudited consolidated
financial statements that are not included in this prospectus. The consolidated
statement of operations data for the six-month periods ended June 30, 1998 and
1999, and the consolidated balance sheet data as of June 30, 1999, are
unaudited. In the opinion of management, all necessary adjustments (consisting
only of normal recurring adjustments) have been included to present fairly the
unaudited quarterly results when read in conjunction with the audited
consolidated financial statements and the notes thereto appearing elsewhere in
this prospectus. The historical results are not necessarily indicative of
results to be expected for any future period. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
PERIOD FROM
INCEPTION
(FEBRUARY 2, SIX MONTHS
1996) TO YEAR ENDED ENDED
DECEMBER 31, DECEMBER 31, JUNE 30,
1996 1997 1998 1998 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net revenues............................................... $ -- $ -- $ 3,807 $ -- $ 27,600
Cost of revenues........................................... -- -- 4,416 219 14,393
Gross profit (loss)...................................... -- -- (609) (219) 13,207
Operating expenses:
Research and development................................. 1,850 9,406 23,987 9,558 14,172
Sales and marketing...................................... -- 1,149 4,216 1,283 6,452
General and administrative............................... 89 1,043 2,223 779 1,753
Amortization of deferred stock compensation.............. -- -- 1,235 213 1,795
Total operating expenses............................... 1,939 11,598 31,661 11,833 24,172
Operating loss............................................. (1,939) (11,598) (32,270) (12,052) (10,965)
Interest income (expense), net............................. 140 1,235 1,301 946 560
Loss before income taxes................................... (1,799) (10,363) (30,969) (11,106) (10,405)
Provision for income taxes................................. -- -- 2 2 122
Net loss................................................... $(1,799) $(10,363) $(30,971) $(11,108) $(10,527)
======= ======== ======== ======== ========
Basic and diluted net loss per share(1).................... $ (0.46) $ (1.21) $ (2.39) $ (0.98) $ (0.64)
======= ======== ======== ======== ========
Shares used in computing basic and diluted net loss per
share(1)................................................. 3,958 8,591 12,957 11,372 16,436
======= ======== ======== ======== ========
Pro forma basic and diluted net loss per share
(unaudited)(1)........................................... $ (0.84) $ (0.26)
======== ========
Shares used in computing pro forma basic and diluted net
loss per share (unaudited)(1)............................ 37,070 40,816
======== ========
CONSOLIDATED BALANCE SHEET DATA (AT PERIOD END):
Cash, cash equivalents and short-term investments.......... $ 9,468 $ 46,227 $ 20,098 $107,801
Working capital............................................ 9,315 44,691 14,432 99,358
Total assets............................................... 10,388 50,210 36,671 143,131
Long-term obligations, less current portion................ 408 2,083 5,204 2,521
Stockholders' equity....................................... 9,728 46,048 17,065 113,974
(End of item excerpt.)
RESULTS OF OPERATIONS
NET REVENUES
The quarter ended December 31, 1998, was our first quarter of revenue. Net
revenues were $3.8 million in the year ended December 31, 1998, and $27.6
million for the six months ended June 30, 1999 (none for the corresponding six
month period of the preceding year). Two customers accounted for 100% of the net
revenues in the three months ended December 31, 1998, and two customers
accounted for 62% of the net revenues in the six months ended June 30, 1999.
COST OF REVENUES
Cost of revenues for the year ended December 31, 1998, were $4.4 million
and for the six months ended June 30, 1999, were $14.4 million ($219,000 for the
corresponding six month period of the preceding year). Cost of revenues includes
the cost of our manufacturing overhead and customer service and support
organizations.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses were $24.0 million in 1998, an increase
of $14.6 million or 155% over 1997, and were $14.2 million in the six months
ended June 30, 1999, an increase of $4.6 million or 48% over the comparable
period of 1998. The increase was due primarily to increased costs associated
with a significant increase in personnel, which accounted for approximately 30%
of the increase in 1998 over 1997 and 70% of the increase in the six months
ended June 30, 1999 over the comparable period in 1998. An increase in
non-recurring engineering costs accounted for approximately 10% of the increase
in 1998 over 1997 and a negligible portion of the increase in the six months
ended June 30, 1999 over the comparable period in 1998. The increase in research
and development expenses in 1998 over 1997 was due also to an increase in
prototype expenses, which accounted for approximately 40% of the increase;
however, the increase in research and development expenses in the six months
ended June 30, 1999 over the comparable period in 1998 was partially offset by a
decrease of approximately 30% in prototype expenses. The primary purposes of the
increase in research and development expenses were to support the completion,
bring-up, alpha test (the early tests of the product in labs) and beta test (the
tests conducted at customer premises just prior to shipping the product when
product is of sufficient quality to run in production networks) phases of the
product development and to complete the M40 product as well as increased
research and development expenses for next generation products. Development is
essential to our future success and we expect that research and development
expenses will increase in absolute dollars in future periods.
SALES AND MARKETING EXPENSES
Sales and marketing expenses were $4.2 million in 1998, an increase of
$3.1 million or 267% over 1997, and were $6.5 million in the six months ended
June 30, 1999, an increase of $5.2 million or 403%
(End of Item Excerpt)
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth information known to us with respect to the
beneficial ownership of our common stock as of June 30, 1999, and as adjusted to
reflect the sale of common stock offered in this prospectus:
- each stockholder known by us to own beneficially more than 5% of our common
stock, as explained below;
- each of the Named Executive Officers;
- each of our directors;
- all of our directors and executive officers as a group; and
- all other selling stockholders.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options or warrants held by that person that
are currently exercisable or will become exercisable within 60 days after June
30, 1999, are deemed outstanding, while the shares are not deemed outstanding
for purposes of computing percentage ownership of any other person. Unless
otherwise indicated in the footnotes below, the persons and entities named in
the table have sole voting or investment power with respect to all shares
beneficially owned, subject to community property laws where applicable.
The number and percentage of shares beneficially owned are based on the
aggregate of 49,777,014 shares of common stock outstanding as of June 30, 1999.
SHARES OF SHARES OF
COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED BENEFICIALLY OWNED
BEFORE SALE UNDER THIS SHARES AFTER SALE UNDER
PROSPECTUS TO THIS PROSPECTUS(2)
----------------------- BE -----------------------
NUMBER PERCENTAGE SOLD(2) NUMBER PERCENTAGE
OFFICERS AND DIRECTORS(1):
Scott Kriens(3).......................... 3,153,485 6.3% -- 3,153,485 6.1%
Steven Haley(4).......................... 375,630 * -- 375,630 *
Pradeep Sindhu(5)........................ 2,251,785 4.5 -- 2,251,785 4.4
Peter Wexler(6).......................... 676,020 1.4 -- 676,020 1.3
Marcel Gani(7)........................... 417,165 * -- 417,165 *
William Hearst(8)........................ 10,828,125 21.8 -- 10,828,125 21.1
c/o Kleiner, Perkins, Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
Vinod Khosla(9).......................... 10,828,125 21.8 -- 10,828,125 21.1
c/o Kleiner, Perkins, Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
C. Richard Kramlich(10).................. 2,812,501 5.7 -- 2,812,501 5.5
c/o New Enterprise Associates
2490 Sand Hill Road
Menlo Park, CA 94025
William R. Stensrud(11).................. 315,000 * -- 315,000 *
c/o Enterprise Partners
7979 Ivanhoe Ave., Suite 550
La Jolla, CA 92037
All directors and executive officers as a
group (11 persons)(12)................. 21,585,156 43.4 -- 21,585,156 42.1
5% STOCKHOLDERS:
Kleiner, Perkins, Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025(13)............... 10,828,125 21.8 -- 10,828,125 21.1
New Enterprise Associates
2490 Sand Hill Road
Menlo Park, CA 94025(14)............... 2,812,501 5.7 -- 2,812,501 5.5
Ericsson Business Networks AB
S-131 89 Stockholm Sweden.............. 3,248,401 6.5 -- 3,248,401 6.3
SELLING STOCKHOLDERS:
Newbridge Networks Corporation(15)....... 1,763,718 3.5 1,525,000 238,718 *
Lucent Technologies Inc.(15) ............ 1,763,718 3.5 1,525,000 238,718 *
MCI WorldCom Venture Fund, Inc. ......... 1,259,799 2.5 250,000 1,009,799 2.0
Anshutz Family Investment Company LLC.... 599,523 1.2 200,000 399,523 *
(End of item excerpt.)
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