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CrossWorlds sees mild IPO start

CrossWorlds Software (Nasdaq: CWLD) inched higher in its public trading debut.

Shares of CrossWorlds opened at 10 and closed Thursday's regular trading at 10 1/8. CrossWorlds, whose software integrates data from different e-business applications, sold 4 million shares in its IPO.

At $10 apiece, the stock sold at the bottom of its $10 to $12 price range. CrossWorlds had originally hoped to sell shares between $14 and $16, but the company repriced the IPO at the lower range this week.

Chase H&Q led the underwriting team. Dain Rauscher Wessels and Thomas Weisel Partners acted as co-managers.

The company now has more than 24.8 million shares outstanding, following the offering.

CrossWorlds first filed to go public in February. Some of the money raised will be used for acquisitions or investments, the company said in its prospectus filed with the U.S. Securities and Exchange Commission.

Like most newly-public tech companies, CrossWorlds is not profitable. The company, which started shipping products in November 1997, reported an operating loss of $10.5 million on revenue of $7.7 million in the latest quarter ended March 31.

License fees generated 41.3 percent of the company's revenue in the March quarter. Service, maintenance and other items represented the rest of CrossWorlds' revenue.

The company gets most of its business from telecommunications and manufacturing companies, which combined generated 75 percent of CrossWorlds' revenue in the March quarter. CrossWorlds had 50 customers in that period, including 23 telecom and 15 manufacturing firms.

One customer was responsible for more than a fifth of CrossWorlds' business last year. Five clients generated more than half of the company's revenue in 1999.

CrossWorlds had 235 employees at the end of March, compared to 111 at the end of 1997.

The company sees most of its competition coming from customers' internal IT departments and systems integrators that develop their own customized integration software. CrossWorlds also cited competition in some areas from companies such as BEA Systems (Nasdaq: BEAS), Microsoft (Nasdaq: MSFT), Tibco Software (Nasdaq: TIBX), Active Software (Nasdaq: ASWX), Mercator Software (Nasdaq: MCTR), New Era of Networks (Nasdaq: NEON), OnDisplay (Nasdaq: ONDS), Software Technologies (Nasdaq: STCS), Vitria Technology (Nasdaq: VITR) and WebMethods (Nasdaq: WEBM).>