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Irvine-Based Continuus Plans Public Stock Offering

Market: Developer of business-oriented software hasn't disclosed number or price of shares.

April 27, 1999|From Bloomberg News

Continuus Software Corp., which makes programs to help companies utilize business-management software and develop Web sites, is planning an initial public offering that could raise as much as $40.5 million.

The Irvine-based company plans to sell an unspecified number of shares of common stock, raising money for general purposes and possible acquisitions, although no buyouts are in the works now, according to a report filed with the Securities and Exchange Commission.

Continuus products help client companies handle "explosive growth in the scale and complexity of software," the IPO filing said Friday.

Programmers use the company's tools and consulting services to manage the process of installing and customizing business-planning software. Clients also use Continuus software to help develop Internet-based applications--an increasingly important part of the company's growth strategy, according to the filing.

Continuus said it hasn't turned a profit in any year since its founding, including a net loss of nearly $3.9 million in 1998 on sales of $27.4 million. Last year's revenue was an 18% increase from $23.3 million in 1997, while its net loss was bigger than the $1.6 million net loss Continuus recorded in 1997, the filing said.

The company has posted operating profits in its two most recent quarters. Meanwhile, its net loss narrowed to $198,000 in this year's first quarter, from $649,000 in the first quarter a year ago, according to the filing., First-quarter revenue rose 21% to $8.2 million from $6.8 million a year earlier.

The company expects net losses to continue for "the foreseeable future," the filing stated.

Continuus, headed by Chairman and Chief Executive John R. Wark, didn't disclose the exact number of shares it plans to sell or the price it will seek in the IPO. The company estimated the top value for the offering at $40.5 million only to calculate the SEC registration fee. That amount also figures in an over-allotment of extra shares, in case the sale is oversubscribed, and an unspecified number of shares to be offered by existing shareholders, the IPO filing said.

The filing didn't say who among current owners plans to sell stock in the IPO.

An affiliate of Norwest Venture Partners of Palo Alto is the top shareholder now, with a 29% stake before the offering. A Brentwood Venture Capital entity, based in Menlo Park, owns another 21%. The SEC filing didn't indicate how big a percentage anyone will hold after the initial offering.

Continuus hired U.S. Bancorp Piper Jaffray Inc. and CIBC World Markets to underwrite the stock sale, and plans to have its shares listed for trading on the Nasdaq Stock Market under the symbol CNSW, according to the registration statement.

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