NetGear IPO Garners Good Response On Wall Street

In its initial public offering, Netgear Wednesday sold 7 million shares of common stock at $14 per share, raising $98 million, according to underwriter Lehman Brothers. Also on Wednesday, the vendor upped its initial stock price to $14 per share from earlier estimates of $12 per share to $10 per share, as indicated in recent filings with the Securities and Exchange Commission.

NetGear saw the price of its stock, trading under the ticker symbol NTGR, soar to nearly $18 per share in late-morning trading Thursday. The company's SEC filings indicate that the IPO provides an estimated market value of $381 million with about 27.2 million shares outstanding.

NetGear has granted its underwriters--Lehman Brothers, Merrill Lynch & Co. and UBS Investment Bank--a 30-day option to purchase up to 1,050,000 additional shares of common stock at the public offering price, less the underwriting discount to cover over-allotments, according to NetGear's SEC filings.

For its quarter ended June 29, 2003, NetGear reported unaudited results, including gross income of $19.1 million on net sales of $69 million. Income from operations was $3.3 million, which includes amortization of deferred stock-based compensation of $422,000.

NetGear reported net income of $1.6 million for the three months ended March 30, 2003. The company has operated at a net loss for three of the past five years, and its accumulated deficit as of March 30, 2003, was $36.8 million.

In 2002, NetGear reported net income of $801 million. As a result of a deemed dividend on preferred stock of $17.9 million recorded during 2002, the company had a net loss attributable to common stockholders of $9.7 million for the year.