Infinera filed its initial S-1 in February. No date has been set for the IPO, but when it goes public, the company plans to trade on Nasdaq under the ticker symbol INFN. After the offering, Infinera will have 83.1 million shares outstanding. (See Infinera Builds in Q1.)
Goldman Sachs & Co. , Citigroup , JP.MorganChase , Lehman Brothers , and Thomas Weisel Partners will serve as underwriters on the IPO. In addition to the 14 million shares that Infinera plans to issue, an additional 2.1 million shares will go to the underwriting companies.
The company says that it will use proceeds of the IPO for working capital and other general corporate purposes, including financing growth, developing new products, and possibly expanding its business through acquisitions. It also may use some of the funds to repay certain credit facilities.
Infinera, which makes a highly integrated DWDM system, had raised more than $315 million in venture capital financing since it was founded in 2000. Its most recent funding round, for $110 million, came in July 2006.
The IPO pricing comes just a few weeks after Infinera filed its first-quarter earnings with the SEC. According to that document, filed on May 10, Infinera reported a second consecutive quarter of strong revenues. (See Infinera Builds in Q1.)
For the first quarter, Infinera reported a loss of $19.8 million, or $2.62 a share, on revenues of $49.2 million. That compared with a loss of $25 million, or $3.55 a share, on sales of $43.8 million in the fourth quarter of 2006.
While the increasing revenues are a positive sign, the company is still unprofitable, posting a combined net loss of $89.9 million for fiscal year 2006.
Table 1: Infinera in the Red
|Net loss ($M)||(34.1)||(50.2)||(66.5)||(64.6)||(89.1)|
|Net loss per share||($17.05)||($16.10)||($15.30)||($13.76)||($14.55)|
|Cash & equivalents ($M)||50||54.2||40||37.1||29.6|
|Source: Infinera Corp.; figures as of Dec. 31 of each year|
Another concern is that some of Infinera's best customers, so far, are combining. The restated S-1 reports that Level 3 Communications Inc. (NYSE: LVLT) and Broadwing, which Level 3 acquired in January, accounted for 75 percent of its revenues in 2006.
Infinera's challenge, as it grows up as a public company, will be to win a big carrier contract, perhaps at the expense of competitors such as Alcatel-Lucent (NYSE: ALU), Cisco Systems Inc. (Nasdaq: CSCO), Nortel Networks Ltd. , or Siemens AG (NYSE: SI; Frankfurt: SIE).
So far, its recent customer wins include Global Crossing (Nasdaq: GLBC), Integra Telecom Inc. , Internet2 , Mid-Atlantic Broadband Cooperative , and FPL FiberNet LLC . (See Global Crossing Picks Infinera, Integra Picks Infinera, Internet2 Picks Infinera, MBC Selects Infinera, and FPL Selects Infinera.)
— Ryan Lawler, Reporter, Light Reading