The Redwood City, California-based company of 60 secures Internet communications services for businesses, and compares to Software.com (Nasdaq: SWCM) and Critical Path (Nasdaq: CPTH).
Lead underwriter is CS First Boston, co-managers are Hambrecht & Quist and ING Baring Furman.
Total revenue for the three months ended March 31. 1999 was a mere $693 000, compared to $450 000 in the previous year's quarter. Net loss was $1.8 million, or 44 cents a share in the 1999 quarter, versus $1.4 million or 40 cents a share in the previous year. As of March 31, 1999, Tumbleweed had cumulative net losses of $13.0 million.
The company cites limited revenue sources and competition as causes for investors' concern in its filings. Only a limited number of service provider customers, such as the United Parcel Service, International Postal Corporation, Pitney Bowes and Nippon Telegraph and Telephone Corporation use its products. These customers also may compete with Tumbleweed's services through their traditional physical delivery channels. They could also migrate to competitors, since Tumbleweed's contracts are non-exclusive.
Companies which compete with Tumbleweed to take over data delivery from traditional mail and courier delivery services, such as Federal Express Corporation, United Parcel Service or the U.S. Postal Service include Differential Inc., e-Parcel, LLC, NetDox, Inc., PostX Corporation and The docSpace Company Inc.
Lead underwriter for the deal is Needham & Co., co-managers are Cruttenden Roth and John G. Kinnard.
The Minneapolis, Minnesota-based company of 135 employees is an integrator of open systems data storage solutions. Similar Companies include MTI Technology Corp. (Nasdaq : MTIC) and Box Hill Systems Corp. (NYSE: BXH).