Zhone Technologies Inc. confirmed today that it has withdrawn its registration for a $345 million initial public offering.

Zhone spokesperson Tim Donovan says the company is waiting until market conditions improve before it revisits its efforts to go public. “This isn’t any reflection of our core business or how we feel about the company,” he says.

Zhone, which makes a wide variety of local access equipment for service providers, first filed to go public in October 2000. Its most recent S-1 filing update was in December, when the company reported that its revenues for all of 1999 were $60.5 million and its losses for that year totaled $129.6 million (see Zhone Files for IPO).

The fact that Zhone has pulled its IPO speaks volumes about the IPO market. The company, founded by former Ascend executives Mory Ejabat and Jeanette Symons, hasn't lacked for confidence. The company has embarked on an ambitious, multifaceted product strategy. One of its products, the Broadband Access Node, will aim to combine data switching, voice switching, and routing functions into a single box(see Zhone Details Product Strategy).

Shortly after raising $500 million in venture capital and leveraged buyout money, the company went out and bought five companies in 2000 alone: CAG Technologies, an electronics subsystems maker; Premisys Communications, whose Integrated Multiple Access Communications Server (IMACS) provides most of Zhone’s revenues; Roundview Inc., a group of networking software engineers; OptaPhone Systems Inc., maker of point-to-point wireless systems; and Xybridge Technologies Inc., a Richardson, Texas-based softswitch vendor that produces devices designed to replace central office circuit switches with faster packet switches (see Zhone to Acquire Xybridge).

Donovan says Zhone’s revenues have grown “exponentially” from previously reported financial results, though he declined to give numbers. He says Zhone is still growing, despite its recent decision to consolidate offices, layoff employees, and cut costs (see Zhone Rezones ).

“We now have a couple of new products we haven't announced yet that we’re deriving revenue from,” he says. “It made a lot of sense to just pull the filing because when you have that S-1 out there, you’re in a quiet period.”

Zhone, of course, isn’t alone in its decision to wait a while before asking the public markets for funding. Convergent Networks Inc., OMM Inc., and Chorum Technologies Inc. have all decided to pull their IPO bids in recent months. On the other hand, Quantum Bridge Communications Inc. has decided to keep its SEC filings current, and Tellium Inc. is in the throes of its investor road show (see Tellium Hits the Road and Quantum Bridge Stays the Course).

“When we look at all these other companies that have gone public recently, such as Riverstone Networks (Nasdaq: RSTN), I mean, it’s a forced play,” Donovan says. “What company in their right mind would go public in a market that’s not settled yet?”

Riverstone Networks had no comment. Riverstone shares now trade at more than $18, up 33 percent from its IPO price of $12 a share. The company has a market capitalization of $1.88 billion.

-- Phil Harvey, Senior Editor, Light Reading http://www.lightreading.com