The recession has put a damper on companies seeking initial public offerings, or IPOs. Earlier this month, Bloomberg News said about 90 companies filed for IPOs in the second quarter of 2010, but 50 of the IPO offerings had been shelved.
Not so with SiGe Semiconductor, which will trade on the Nasdaq under the ticker SIGE. Based in Andover, Mass., SiGe said it hopes to raise up to $144 million, but it has not yet set a date for the proposed offering.
That makes sense. If you’re a provider of radio frequency semiconductors for use in computing, home entertainment, networking, and mobile applications, now is the time for an initial public offering. The likes of Apple Inc. (NASDAQ: AAPL), Cisco (NASDAQ: CSCO), Lenovo (PINK: LNVGY), Hewlett-Packard (NYSE: HPQ), Nintendo (PINK: NTDOY) and Samsung are already using its products, according to the SEC filing.
SiGe began life in Canada in 1996. Since its birth it has yet to turn an annual profit. In fact, its results total a deficit of nearly $115 million as of the first of the year.
However, revenue has grown more than 40% a year in six of the last seven fiscal years, SiGe said. It posted a quarterly profit of $151,000 in the first quarter of this year. SIGE has $18.67 million in working capital, according to the filing, and total capitalization of $21.64 million.
The sale of preferred stock has brought in $130.7 million.
The company is headed up by Sohail A. Khan, president and CEO. Its main venue of operation besides Andover is in Ottawa.
SiGe says in its filing that it primarily sells its products to original design manufacturers and to a lesser extent directly to original equipment manufacturers.
One risk associated with SiGe, according to its filing, is that it depends on a small number of customers for a substantial portion of its revenue
Hon Hai, Promaster, USI, Nintendo and RichPower collectively accounted 89% of revenue in fiscal 2009. And the small number of sources of revenue will continue, SiGe said in its filing.
As of this writing, Wayne Faulkner did not own a position in any of the stocks named here.
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