Shares of eOn Communications Corp. (Nasdaq: EONC) gained 11 to 23. EOn priced 3 million shares at $12 each, the top of its $10 to $12 range.
The PBX (private branch exchange) and Linux server vendor will sell 2.24 million shares while current stockholders plan to sell 760,000 shares, according to a prospectus filed with the Securities and Exchange Commission. The underwriters, Needham & Co and A.G. Edwards & Sons and WR Hambrecht & Co., have been allotted an extra 300,000 shares in the event of heavy demand.
The offering should do well, concerning the Linux association, and the company's solid financials. eOn designs, develops and markets Linux communications servers and software that integrates and manages voice, email and Internet communications for customer contact centers and other applications.
Unlike most IPOs, eOn actually makes money. For the three months ended October 31, net income was $335,000 on revenue of $14.3 million, compared to income of $340,000 on revenue of $8.5 million for the same period in 1998.
The company sees competition from five categories: data communications equipment suppliers Cisco Systems (Nasdaq: CSCO), 3Com (Nasdaq: COMS) and Sun Microsystems (Nasdaq: SUNW); web center software and services suppliers eGain (Nasdaq: EGAN) and Kana Communications (Nasdaq: KANA); contact center software and services suppliers, Clarify (Nasdaq: CLFY) (being bought by Nortel (NYSE: NT)), Genesys Telecommunications (Nasdaq; GCTI) (being bought by Alcatel (NYSE: ALA) and Silknet Software (Nasdaq: SILK); emerging private communications exchange (PCX) suppliers, such as AltiGen Communications (Nasdaq: ATGN); and voice communications equipment suppliers, such as Alcatel, Aspect Communications (Nasdaq: ASPT), Lucent Technologies (NYSE: LU) and Nortel.
Along with the acceptance of the Linux operating system, the company said its business depends on its ability to continue selling its Millennium products, a line for voice switching. About 40 percent of total pro forma revenues for 1999 came from the sale of these products.
The company makes process control metrology systems for use in semiconductor manufacturing. Lehman Brothers is the deal's lead underwriter, and Banc of America is acting as a co-manager.
For the 6 months ended September 30, Therma-Wave had net loss of $3.3 million on revenue of $47 million, versus a much wider net loss of $11.1 million on revenue of $30.4 million in 1998's comparable 6 months.
The company's therma-probe systems compete with other metrology systems designed by KLA-Tencor (Nasdaq: KLAC) Kokusai Electric Ltd. and Bio-Rad Semiconductor Systems. Its Opti-Probe systems primarily compete with thin film metrology systems manufactured by KLA-Tencor, Rudolph Technologies (Nasdaq: RTEC), Nanometrics (Nasdaq: NANO) and Dai Nippon Screen.