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=================== |
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Financial Performance & Scoring -- © 2007 Gaskins IPO Desktop/IPOdesktop |
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Pre-IPO analysis, grading & scoring -- updated March 25 |
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. Business Model Rating Criteria |
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A = high growth market, potential leader; B = more competitive market; C= 'public venture capital' |
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. Calculations |
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. IPO Price to annualized Sales Ratio -- (Price / Sales) |
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Numerator |
Denominator |
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IPO market capitalization… |
Annualized Sales (based on recent results) |
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(post-IPO # of shares times mid-point of IPO price range) |
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. IPO Price to annualized Earnings (loss) -- (Price / Earnings) |
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Numerator |
Denominator |
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IPO market cap |
Annualized Earnings (loss) from the last quarter |
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=================== |
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SEARCH BY COMPANY |
In your browser use 'Edit/Find' to search for companies |
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or ticker for analysis |
scheduled below |
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=================== |
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March 26 week IPO schedule |
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|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Aruba Networks (ARUN) |
$677 |
6.6 |
-29 |
8.5 |
8.5 |
11% |
|
secure data wireless networking: C+, 8 |
Post-IPO shrs: 75mm |
|||||
|
Capital Prod L.P (CPLP) |
$420 |
28.0 |
91 |
1.9 |
1.9 |
56% |
|
shipping vessel partnership: C+, 7 |
Post-IPO shrs: 21mm |
|||||
|
eTelecare Global (ETEL) |
$374 |
1.6 |
17 |
4.0 |
4.8 |
20% |
|
voice-based business outsourcing: C+, 7 |
Post-IPO shrs:28mm ADS equiv |
|||||
|
Flagstone Reinsure FSR |
$1,141 |
3.0 |
6 |
1.0 |
1.1 |
15% |
|
property and casualty reinsurance: C+, 7 |
Post-IPO shrs: 85mm |
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|
GSI Technology (GSIT) |
$199 |
3.4 |
25 |
2.6 |
2.6 |
29% |
|
SRAM integrated circuits: C+, 6 |
March 31 fiscal |
Post-IPO shrs: 28mm |
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|
SenoRx (SENO) |
$180 |
7.0 |
-12 |
2.6 |
3.4 |
37% |
|
medical devices: C, 8 |
Post-IPO shrs: 15mm |
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|
Super Micro (SMCI) |
$300 |
0.7 |
15 |
2.6 |
2.6 |
28% |
|
high performance servers: B-, 7 |
Post-IPO shrs: 29mm |
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|
=================== |
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|
March 26 week analysis |
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|
Aruba Networks |
ARUN, C+, 8 |
|||||
|
secure data wireless networking |
July 31 fiscal |
Post-IPO shrs: 75mm |
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|
Sunnyvale, CA |
2004 |
2005 |
2006 |
Jan 06* |
Jan 07* |
IPO Mkt |
|
Rev ($mm) |
$1 |
$12 |
$73 |
$28 |
$51 |
Cap (mm) |
|
Gross Profit % |
-136% |
25% |
59% |
55% |
61% |
$677 |
|
Profit (loss) ($mm) |
($22.5) |
($32.6) |
($12.0) |
($9.0) |
($11.8) |
@$9 |
|
Profit (loss) % |
-2045% |
-272% |
-17% |
-32% |
-23% |
|
|
6 months ended Jan 31 |
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|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Aruba Networks (ARUN) |
$677 |
6.6 |
-29 |
8.5 |
8.5 |
11% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
2 |
2 |
2 |
2 |
8 |
|
|
Business |
||||||
|
. Enterprise mobility solution that enables secure access to data, voice and video applications |
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|
across wireless and wireline enterprise networks. |
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|
. The Aruba Mobile Edge Architecture allows end-users to roam to different locations within an |
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|
enterprise campus or office building while maintaining secure and consistent access to all of their |
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|
network resources. |
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|
. ARUN's architecture also enables IT managers to establish and enforce policies that control |
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|
network access and prioritize application delivery based on an end-user's organizational role and |
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|
authorization level. |
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|
. ARUN enables enterprise customers to extend the same user-centric solution to remote locations |
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|
such as branch offices and home offices connected over the Internet. |
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|
ARUN's solution |
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|
ARUN's solution integrates the ArubaOS operating system, optional value-added software |
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|
modules, a centralized mobility management system, high-performance programmable mobility |
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|
controllers, and wired and wireless access points. |
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|
Relationship with Microsoft |
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|
. ARUN's strategic relationship with Microsoft began in June 2005, when Microsoft chose |
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|
ARUN's products for a worldwide deployment, pursuant to which Microsoft has installed ARUN |
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|
products in various sites in the United States, Asia and Europe. |
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|
. As part of the relationship, ARUN supports Microsoft's Network Access Protection (NAP) |
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|
architecture for enterprise security and provide interoperability with Microsoft products such as |
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|
the Internet Authentication Server (IAS) and Network Policy Server (NPS). |
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|
. In addition, ARUN entered into a stock issuance agreement with Microsoft, pursuant to which, |
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|
upon the closing of the initial public offering, ARUN will issue shares of common stock to |
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|
Microsoft with a value of $3.5 million, based on the initial public offering price. |
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|
. Upon completion of this offering, and assuming all other revenue recognition criteria have been |
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|
met, ARUN will recognize revenues on sales to Microsoft in excess of $3.5 million. |
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|
(looks like ARUN is paying Microsoft to be a customer) |
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|
Six months comparison, Jan 31 2007 versus Jan 31 2006 |
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|
. Total revenues increased 85% over the six months ended January 31, 2007 due to a $33.1 million |
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|
increase in product and related professional services and support sales to new and existing |
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|
customers, partially offset by a $9.6 million decrease in ratable product and related professional |
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|
services and support revenues. |
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|
. In the three months ended January 31, 2007, total revenues increased 9% over the three months |
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|
ended October 31, 2006 due to a $4.1 million increase in product and related professional services |
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|
and support sales to new and existing customers, partially offset by a $1.9 million decrease in |
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|
ratable product and related professional services and support revenues. |
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|
. ARUN expects ratable product and related professional services and support revenues to continue |
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|
to decrease in absolute dollars and as a percentage of total revenues in future periods., see note |
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|
below |
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|
Note: |
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|
. In Q2 of fiscal 2006 (May, 2005 quarter) revenue began to be recognized when program |
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|
segments were delivered and accepted, instead of over the life of the support contract. |
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|
. Before, the policy was that revenue was initially deferred and then released to the income |
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|
statement over the life of the support contract |
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|
. At January 31, 2007, had $7.8 million in deferred revenue associated with ratable product and |
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|
professional services and support revenues, of which $2.1 million will be amortized to revenue |
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|
over the remainder of fiscal 2007 and $3.5 million, $1.4 million and $800,000 will be amortized to |
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|
revenue in fiscal 2008, 2009 and 2010, respectively. |
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|
Product differentiation |
||||||
|
. ARUN believes that the Aruba Mobile Edge Architecture is fundamentally different from "fixed |
||||||
|
edge" mobility solutions such as Wireless Local Area Networks (WLANs), open access to fixed |
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|
ports and Virtual Private Networks (VPNs). |
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|
. ARUN's user-centric architecture enables a new "mobile edge" that allows users to enjoy secure, |
||||||
|
high performance access to network applications as they roam across the enterprise network and to |
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|
remote locations that have an Internet connection. |
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|
. Using ARUN's architecture, IT departments can manage user-based network access and enforce |
||||||
|
application delivery policies from a single integrated point-of-control in a consistent manner. |
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|
StockValution by an outside third party for stock option purposes |
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|
'4/30/2006: $2.19 |
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|
'6/30/2006 $2.33 |
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|
'10/2/2006: $3.63 |
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|
'11/7/2006: $4.94 |
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|
'11/21/2006: $5.12 |
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|
'12/13/2006: $5.74 |
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|
'1/25/2007: $7.21 |
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|
History |
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|
. Founded in 2002 with the intention to develop a new approach to enabling secure enterprise |
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|
mobility. |
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|
. ARUN believes that end-users and IT departments were demanding mobility solutions, but |
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|
traditional approaches were limited by security, application performance and scalability |
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|
challenges. |
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|
. Began commercial shipments in June 2003. Since that time, ARUN's products have been sold to |
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|
more than 2,000 end customers worldwide, including some of the largest and most complex global |
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|
organizations such as Burlington Northern Santa Fe, Google, Guangzhou Metro, NTT Data |
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|
Corporation, The Ohio State University, Pu Dong International Airport (Shanghai), SAP, Saudi |
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|
Aramco, United States Air Force and University of Washington. |
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|
Competition |
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|
. Primary competitors include Cisco Systems, primarily through its Wireless Networking Business |
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|
Unit, and Symbol Technologies (which was recently acquired by Motorola for $3.9 billion). |
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|
. Also faces competition from a number of smaller private companies and new market entrants. |
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|
Use of $64.6mm in IPO proceeds |
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|
. Based on ARUN's current cash and cash equivalents balances, ARUN does not expect that it will |
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|
have to utilize the net proceeds of this offering to fund operations during the 12 months following |
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|
this offering. |
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|
. Currently plans to use the net proceeds for working capital and general corporate purposes, |
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|
including further expansion of sales and support functions for both direct and indirect sales |
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|
channels. |
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|
. Specifically, plans to hire additional personnel and anticipate incurring additional facilities costs |
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|
associated with such increased sales headcount. |
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|
. Also expects to increase investments in research and development by hiring additional engineers. |
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|
=================== |
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|
Capital Product Partners |
CPLP, C+, 7 |
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|
shipping vessel partnership |
Post-IPO shrs: 21mm |
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|
Piraeus, Athens, Greece |
2006 |
IPO Mkt |
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|
Rev ($mm) |
$15 |
Cap (mm) |
||||
|
Profit (loss) ($mm) |
$4.6 |
$420 |
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|
Profit (loss) % |
31% |
@$20 |
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|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales* |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Capital Prod L.P (CPLP) |
$420 |
28.0 |
91 |
1.9 |
1.9 |
56% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
2 |
2 |
2 |
1 |
7 |
|
|
Compare & contrast with withdrawn IPO of the parent Capital Maritime in the summer of 2005 |
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|
Capital MaritimeCPM |
$945 |
3.1 |
4.7 |
2.5 |
2.5 |
27% |
|
Capital Prod L.P (CPLP) |
$420 |
28.0 |
91 |
1.9 |
1.9 |
56% |
|
Initial anticipated distribution rate |
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|
. $0.3750 per unit, or $1.50 per year. |
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|
. 7.5% on an annual basis |
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|
Business |
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|
. An international owner of product tankers, newly formed by Capital Maritime, an international |
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|
shipping company with a long history of operating and investing in the shipping market. |
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|
. Charters vessels under medium to long-term time and bareboat charters (two to ten years, with an |
||||||
|
average remaining term of approximately 6.3 years) to large charterers. |
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|
Note: the parent Capital Maritime pulled it's proposed IPO at the last minute in the summary of 2005, see below |
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|
Limited operating history |
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|
As of December 31, 2006, only five of the vessels in the initial fleet had been delivered to the |
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|
relevant vessel-owning subsidiaries |
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|
Following the offering |
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|
. Initial fleet will consist of eight newly built, Ice Class 1A, double-hull, medium-range (MR) |
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|
product tankers, each of which is capable of carrying crude oil, refined oil products, such as |
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|
gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, such as ethanol. |
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|
. CPLP plans plan to leverage the expertise and reputation of Capital Maritime to pursue growth |
||||||
|
opportunities in this market. |
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|
. Upon the closing of this offering, Capital Maritime will own a 44.0% interest in CPLP |
||||||
|
New vessels |
||||||
|
. Have an agreement to purchase seven additional vessels from Capital Maritime comprised of |
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|
four Ice Class 1A sister vessels that are scheduled for delivery in 2007 and three MR product |
||||||
|
tanker sister vessels that are scheduled for delivery in 2008, all of which will be under time or |
||||||
|
bareboat charters that commence at the time of delivery. |
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|
. CPLP expects that by the end of the third quarter of 2008, the contracted fleet will consist of 15 |
||||||
|
MR double-hull product tankers with an average age of approximately 1.3 years |
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|
Use of Proceeds |
||||||
|
100% to Capital Maritime |
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|
++++++++++++++++++++++++++++ |
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|
Capital Maritime |
CPM -- offering pulled in the summary of 2005 |
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|
product tankers, oil-bulk-ore carriers and bulk carrier vessels |
Post-IPO shrs:63mm |
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|
Athens, Greece |
2002 |
2003 |
2004 |
Mrch3mos |
IPO Mkt |
|
|
Revenue ($mm) |
$18 |
$78 |
$189 |
$76 |
Cap (mm) |
|
|
Voyage Ops Exp % |
53% |
44% |
32% |
32% |
$945 |
|
|
Net Income* |
$1.7 |
$26.1 |
146.00 |
50.80 |
@$15 |
|
|
Net Income % |
10% |
34% |
77% |
67% |
||
|
EBIDTDA % |
33% |
50% |
89% |
80% |
||
|
*no taxes according to the filing |
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|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Capital MaritimeCPM |
$945 |
3.1 |
4.7 |
2.5 |
2.5 |
27% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
2 |
2 |
2 |
1 |
7 |
|
|
Business |
||||||
|
. International shipping company that owns, operates and actively manages a diverse fleet of |
||||||
|
product tankers, oil-bulk-ore carriers, or OBOs, and bulk carrier vessels in the highly fragmented |
||||||
|
international shipping market. |
||||||
|
. As of June 3, 2005, existing fleet was comprised of 26 product tankers, including four OBOs, |
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|
and nine bulk carriers, ranging in size from 12,000 dwt to 103,203 dwt. The aggregate carrying |
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|
capacity of the fleet as of that date was approximately 1.7 million dwt. |
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|
Dividend Policy |
||||||
|
Currently targeting an annual dividend of $1.05 per share, payable quarterly |
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|
. $66mm per year, 7% annual rate at price range midpoint of $15 |
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|
Risk |
||||||
|
. Charter hire rates in the spot market are at or near historically high levels |
||||||
|
. The shipping industry is cyclical with attendant volatility in charter hire rates and profitability |
||||||
|
. The degree of charter hire rate volatility among different types of product tanker, OBO and bulk |
||||||
|
carrier vessels has varied widely, and charter hire rates for COM's vessels are currently at or near |
||||||
|
historically high levels. |
||||||
|
. Currently, most of CPM's vessels are employed in the spot market on time and voyage charters |
||||||
|
that were fixed for agreed periods of 12 months or less |
||||||
|
Competition |
||||||
|
Arranges voyage and time charters in the spot market through the use of shipbrokers. |
||||||
|
. The international tanker industry is highly fragmented and is divided among major oil companies |
||||||
|
and independent tanker owners. |
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|
. Ownership of dry bulk carriers is highly fragmented and is divided among many independent dry |
||||||
|
bulk carrier owners. |
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|
Use of $230mm in IPO proceeds |
||||||
|
o $60.0 million of short-term debt used to facilitate the purchase of vessels delivered in the period |
||||||
|
January 1, 2005 to date; and |
||||||
|
o $157.3 million of long-term debt to partially finance the acquisition cost of 24 vessels |
||||||
|
o Balance for general corporate purposes |
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|
=================== |
||||||
|
eTelecare Global Solns |
ETEL, C+, 7 |
|||||
|
voice-based business outsourcing |
Post-IPO shrs:28mm ADS equiv |
|||||
|
Quezon City, Philippines |
2003 |
2004 |
2005 |
2006 |
IPO Mkt |
|
|
Rev ($mm) |
$32 |
$98 |
$152 |
$195 |
Cap (mm) |
|
|
Cost of Servicet % |
63% |
73% |
75% |
70% |
$374 |
|
|
Profit (loss) ($mm) |
($4.5) |
$4.4 |
$2.4 |
$12.2 |
@$13.5 |
|
|
Profit (loss) % |
-14% |
4% |
2% |
6% |
||
|
L:ast four quarters |
||||||
|
March |
June |
Sept |
Dec |
|||
|
Rev ($mm) |
$41 |
$42 |
$52 |
$59 |
||
|
Profit (loss) ($mm) |
$1.7 |
$1.5 |
$4.4 |
$5.6 |
||
|
Profit (loss) % |
4% |
4% |
8% |
9% |
||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales* |
Earnings* |
BookValue |
TangibleBV |
in IPO |
|
|
eTelecare Global (ETEL) |
$374 |
1.6 |
17 |
4.0 |
4.8 |
20% |
|
*annualizing Dec results |
||||||
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
2 |
2 |
2 |
1 |
7 |
|
|
Compare & contrast |
||||||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
Price |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
28-Mar |
|
|
eTelecare Global (ETEL) |
$429 |
1.8 |
19 |
5.5 |
5.5 |
$15.50 |
|
ExLS (EXLS) (a) |
$591 |
3.8 |
25 |
5.7 |
6.1 |
$20.91 |
|
PeopleSupport Inc. (PSPT) (b) |
$280 |
2.3 |
18 |
1.5 |
1.5 |
$11.89 |
|
WNS Holdings (WNS) (c) |
$1,160 |
2.8 |
41 |
6.3 |
8.4 |
$28.88 |
|
IPO-July 26, 2006 at $20 |
||||||
|
(a) IPO'd October 19, 2006 @$13.50 |
||||||
|
(b) IPO'd Oct 1, 2004 @$7 |
||||||
|
(c) IPO'd July 26, 2006 @$20 |
||||||
|
American Depositary Shares (one ADS represents two shares) |
||||||
|
Business |
||||||
|
. A leading provider of business process outsourcing, or BPO, services focusing on the complex, |
||||||
|
voice-based segment of customer care services delivered from both onshore and offshore |
||||||
|
locations. |
||||||
|
. Provides a range of services including technical support, financial advisory services, warranty |
||||||
|
support, customer service, sales, customer retention and marketing surveys and research. |
||||||
|
11 delivery centers, 9.800 employees |
||||||
|
Services are delivered from four delivery centers in the Philippines and seven delivery centers in |
||||||
|
the United States, with approximately 6,800 employees in the Philippines and approximately |
||||||
|
3,000 employees in the United States as of December 31, 2006. |
||||||
|
Clients |
||||||
|
Largest clients in terms of revenue for the year ended December 31, 2006 were American Express |
||||||
|
Company, AOL LLC, Cingular Wireless LLC, Dell Inc., Intuit Inc., Sprint Nextel Corporation and |
||||||
|
Vonage Holdings Corp., together representing approximately 91% of revenue. |
||||||
|
Top line revenue comparisons |
||||||
|
> 2006 |
||||||
|
. In 2006, service revenue increased $42.9 million, or 28.2%, over the prior year. |
||||||
|
. This increase was primarily driven by new service programs with two new and two existing |
||||||
|
clients and, to a lesser extent, expansion of existing service programs with four existing clients. |
||||||
|
. These increases were partially offset by the ramping down of service programs or loss of clients. |
||||||
|
. ETEL declined to reduce pricing with respect to the two largest clients that were lost and another |
||||||
|
client terminated services due to a decline in its business. |
||||||
|
> 2005 |
||||||
|
. In 2005, which included a full year of Phase 2 operations, service revenue increased $54.4 |
||||||
|
million, or 55.6%, over the prior year. |
||||||
|
. This increase was primarily due to our addition of six new programs with four existing clients, |
||||||
|
which ETEL believes was the result of demonstrating value per dollar spent by these clients for |
||||||
|
existing programs, and expansion of a client relationship that gained through our acquisition of |
||||||
|
Phase 2. |
||||||
|
. In addition, revenue in 2005 increased over 2004 due to expansion of existing programs with |
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|
existing clients and the addition of 18 programs with 11 new clients. |
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|
. The increase in revenue in 2005 was partially offset by revenue lost as a result of the decision to |
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|
reduce a significant client program due to ETEL's inability to negotiate satisfactory pricing terms, |
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|
the bankruptcy of one clients and loss of another client, whose direct response marketing program |
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|
was not well suited to ETEL's delivery model due to its sporadic call arrival patterns. |
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|
A Different Business Model? |
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|
See competition below |
||||||
|
. Founded in 1999 by alumni of the management consulting firm McKinsey & Company, who |
||||||
|
implemented analytical tools and a focus on quantifiable value for the client in the customer care |
||||||
|
BPO market. |
||||||
|
. Business model has three key elements: a focus on delivering complex, voice-based BPO |
||||||
|
services via a multi-shore delivery platform; making significant investments in the quality of |
||||||
|
ETEL's people and processes; and entering into contracts that contain pricing terms that clients |
||||||
|
agree are based on the value created per dollar spent by the client, |
||||||
|
. Rather than a pricing model focused solely on being able to deliver the least expensive service |
||||||
|
offering, or a cost-based commodity pricing model, that ETEL believes is most often emphasized |
||||||
|
in its industry. |
||||||
|
Competition |
||||||
|
o offshore-based customer care BPO companies with offshore delivery center services |
||||||
|
capabilities, such as Ambergris Solutions Inc., ePLDT, Inc., ExlService Holdings, Inc., |
||||||
|
PeopleSupport, Inc., and Wipro |
||||||
|
o U.S.-based customer care BPO companies with onshore and offshore delivery center services |
||||||
|
capabilities, such as APAC Customer Services Inc., ClientLogic Corporation, Convergys |
||||||
|
Corporation, ICT Group, Inc., Sutherland Global Services, Inc., SITEL Corporation, Sykes |
||||||
|
Enterprises, Incorporated, TeleTech Holdings, Inc. and West Corporation; |
||||||
|
o broad-based U.S. outsourcing companies such as Accenture Ltd., Affiliated Computer Services, |
||||||
|
Inc., Electronic Data Systems Corporation, and IBM Global Services; and |
||||||
|
o numerous smaller companies, including 24/7 Customer, NuComm International Inc., |
||||||
|
SlashSupport and Vision-X, Inc. |
||||||
|
Use of $66mm in IPO proceeds |
||||||
|
. Repay $30mm in debt |
||||||
|
. Balance for working capital |
||||||
|
=================== |
||||||
|
Flagstone Reinsurance |
FSR, C+, 7 |
|||||
|
property and casualty reinsurance |
Post-IPO shrs: 85mm |
|||||
|
Hamilton, Bermuda |
2006 |
IPO Mkt |
||||
|
Gross Premiums written ($mm) |
$302 |
|||||