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IPOs take last hurrah
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August 13, 2000: 7:15 a.m. ET
New issues to wind down on holiday break; WJ, Viasource highlight week
By Staff Writer Luisa Beltran
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NEW YORK (CNNfn) - The go-go IPO market is preparing for one last hurrah before slowing down for the annual Labor Day break with deals from networking companies, those that provide the backbone for the Internet, expected to show continued strength.
The new issues market continued to turn out a record number of deals last week with 30 IPOs raising $5.27 billion, the busiest week since September 1996. However, this week's offerings are much smaller with only 15 deals expected to raise $990.7 million, according to data from CommScan, a New York-based investment banking research firm.
 Forty-four deals began trading during the last two weeks, said John Fitzgibbon, editor of WorldFinanceNet.com.
"The underwriters were trying to get all the deals done before Labor Day," he said.
After this week, the IPO market will come to a near stop and won't reemerge until the second week of September.
"We're winding down into the Labor Day weekend," he said.
Radio frequency
Networking and broadband companies continue to produce the strongest deals. Analysts pegged WJ Communications Inc. as the week's top deal. The Palo, Alto, Calif.-based company develops radio frequency products that speed the transmission of voice, video and data traffic along communication networks.
"It's got the magic going for them," Fitzgibbon said. "It makes products for fiber optic, broadband cable and wireless."
Customers include Nortel Networks Corp. (NTL: Research, Estimates) and Lucent Technologies (LU: Research, Estimates) that together generated about 69 percent of WJ's sales for the six months ended June 30.
WJ Communications plans to offer 5.4 million shares at $14 to $16 each via underwriters led by Chase H&Q. The company plans to trade under the Nasdaq symbol "WJCI."
More and more broadband
The need for high-speed Internet access will also ensure that Wall Street takes notice of Viasource Communications Inc.
Viasource provides services that connect the networks of broadband service providers on "the critical last mile" to residential customers and end users. Viasource offers installation, integration, fulfillment and long-term maintenance services to clients such as MediaOne Group Inc. (XVF: Research, Estimates) and Qwest Communications International Inc. (Q: Research, Estimates).
"In terms of equipment, these guys have been doing well," said Corey Ostman, co-chief executive of Alert-IPO.com. "And they've already increased their range."
Viasource also installs, designs and maintains local area networks and wide area networks for companies such as Universal Studios and The Walt Disney Co. (DIS: Research, Estimates).
However, the company is not profitable with losses of $37 million on revenue of $109.2 million for the six months ended July 1.
Viasource is similar to deal from Lexent Inc. (LXNT: Research, Estimates) which went public on August 2 offering 6.9 million shares at $15 each via underwriters led by Chase H&Q. Lexent closed Friday up 1-1/16 to 28-1/16.
Viasource Communications plans to offer 11 million shares at $14 to $16 each, up from the originally filed $13 to $15 range, via underwriters led by Donaldson, Lufkin & Jenrette. The company plans to trade under "VVVV."
The need for speed
Integrated Telecom Express Inc. is also getting a nod from analysts. Santa Clara, Calif.-based Integrated Telecom develops ADSL circuit and software for broadband communications providers.
Integrated's products allow communications providers to deliver high-speed Internet access. The company's ADSL technology, a form of digital subscriber lines (DSL), converts existing copper telephone lines into instant high-speed links for Internet access and multimedia access, said Matt Zito, co-founder of IPOguys.com.
"We believe that demand for high-speed Internet access will increase greatly over the next 5 years," he said. "In the long term, we look for exponential growth and demand for products and services by Integrated Telecom Express."
In last four sequential quarters the company has gone from $500,000 in sales to about $10.3 million. In their most recent quarter, Integrated produced a 44 percent gross margin, said Francis Gaskins, editor of Gaskins IPO Desktop (GaskinsCo.com).
"This are the best financials I've seen for a [company] that make components recently," Gaskins said.
Integrated plans to offer 5.6 million shares at $17 to $19 each via underwriters led by Lehman Brothers. The company plans to trade under "ITXI."
Software
Analysts also highlighted Synquest Inc., a provider of e-business software that seeks to improve supply chain performance for clients such as Ford Motor Co., Nordstrom.com and The B.F. Goodrich Co.
Norcross, Ga.-based Synquest offers software that improves efficiency. "The software provides an automated system for companies to get what they need and not have a delay," said Angelish Kumar, IPO analyst with 123Jump.com.
For companies with over 100 customers, the cost savings that can be supplied by Synquest's software is enormous, she said.
However, the company's sales seem to be in a rut, Gaskins said. "For the last four sequential quarters their sales been around $7 million except in the September quarter when they went down to $3.6 million," he said. "When you see a dip like that you wonder about the company."
Synquest plans to offer 5 million shares at $7 to $8 each, down from the originally filed 7.2 million at $9 to $11 a share, via underwriters led by Bear Stearns. The company plans to trade under "SYNQ." 
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