| Network Solutions, Inc. | |||
| (www.netsol.com) | |||
| Ticker: | NSOL | 505 Huntmar Park Drive | |
| Exchange: | NASDAQ-National Market | Herndon, VA 20170 | |
| Industry: | High-Tech (SIC Code 7379) | (703) 742-0400 | |
| Type of Shares: | Class A Common Shares | Filing Date: | 7/3/97 | |
| U.S. Shares: | 3,300,000 | Offer Date: | 9/25/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $17.00 - $19.00 | |
| Primary Shares: | 3,300,000 | Offer Price: | $18.00 | |
| Secondary Shares: | 0 | Gross Spread: | $1.26 | |
| Offering Amount: | $59,400,000 | Selling: | $0.74 | |
| Expenses: | $1,100,000 | Reallowance: | $0.10 | |
| Shares Out After: | - |
| Manager | Tier | Phone |
| Hambrecht & Quist Incorporated | Lead Manager | (415) 439-3626 |
| J.P. Morgan Securities Inc. | Co-manager | (212) 648-0517 |
| PaineWebber Incorporated | Co-manager | (212) 713-2626 |
| Issuer's Law Firm: | Pillsbury Madison & Sutro |
| Bank's Law Firm: | Simpson, Thacher & Bartlett |
| Auditor: | Price Waterhouse |
Dollar amounts in U.S. millions except for per share data | |||||
| 3 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 3/31/97 | 3/31/96 | 3/31/97 | ||
| Revenue: | $18.86 | $8.65 | $2.33 | Assets: | $66.85 |
| Net Income: | -$1.63 | $0.52 | -$1.10 | Curr Assets: | |
| EPS: | Liabilities: | $64.90 | |||
| Prior EPS: | $12.25 | -$1.19 | Curr Liabilities: | ||
| Cash Flow/Oper: | $4.72 | Equity: | $1.95 | ||
| Cash Flow/Fin: | Cash: | ||||
| Cash Flow/Inv: | |||||
| Business Description |
| The company is the leading Internet domain name registration service provider worldwide. The Company currently acts as the exclusive registrar for second level domain names within the .com, .org, .net, .edu and .gov top-level domains ("TLDs"). By registering Internet domain names, the Company enables businesses, other organizations and individuals to establish a unique Internet presence from which to communicate and conduct commerce. Net registrations within the TLDs maintained by the Company increased by 233% from approximately 246,000 domain names registered at March 31, 1996 to approximately 818,000 domain names registered at March 31, 1997. The Company believes that commercial enterprises and individual Internet users worldwide are increasingly recognizing the .com TLD as a desirable address for commercial presence on the Internet. With over 10 million businesses and over 750,000 active trademarks and service marks in the United States alone, the Company believes that the potential for continued growth of domain name registrations by commercial entities and services related to those registrations is substantial. |
| Competition |
| The Company currently is the exclusive registrar for second level domain names within the .com, .org, .net, .edu and .gov TLDs. Multiple registries do not currently register names in the same TLD, but this may change in the future. The Company currently faces competition in the domain name registration business from registries for country codes, third level domain name providers such as Internet access providers and registries of TLDs other than those TLDs currently being registered by the Company. A number of entities have already begun to offer competing registration services using other TLDs. Future competition in the Company's domain name registration business could come from many different companies, including, but not limited to, major telecommunications firms, cable companies and Internet access providers. Such entities have core capabilities to deliver registration services, such as help desks, billing services and network management, along with strong name recognition and Internet industry experience. Other companies with some or all of these capabilities may also enter the registration business. Also emerging are a growing contingent of domain name resellers. The Company's position as the leading registrar of domain names could be materially and adversely affected by the emergence of any of the foregoing competitors and potential competitors, many of which have significantly greater financial, technical, marketing and personnel resources than the Company. In addition, the Company's revenue and subscription fees could be reduced due to increasing competition. For example, if other entities are allowed to share the registration of domain names, these entities may bundle domain name registrations with other products or services, effectively providing such registration services for free. If operational and administrative arrangements and technology permitting multiple competitors to register domain names in the same TLDs are developed or if competition occurs within the Company's existing TLDs, the Company's business, financial condition and results of operations would be materially and adversely affected. |
| Business Plan |
| The Company's goal is to maintain its position as the leader in Internet domain name registration services and to build on this position to be a leading provider of Intranet services and Internet enabling products and services. The Company's strategy includes the following key elements: (I) Maintain Position as Leading Provider of Registration Services, (ii) Establish and Expand Marketing Relationships, (iii) Maintain Active Rolein Establishment of Future Internet Standards and Policies, (iv) Build and Strengthen Internet Services Business, (v) Provide Complementary Enabling Products and Services, (vi) Leverage Technology Leadership and (vii) Pursue Strategic Acquisitions. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for working capital and general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| State Street Bank and Trust Company | 48.70% |
| Officer Name | Title | Age |
| Michael A. Daniels | Chairman of the Board | 51 |
| Gabriel A. Battista | Chief Executive Officer and Director | 52 |
| Robert J. Korzeniewski | Chief Financial Officer | 40 |
| Russell L. Helbert | Controller | 40 |
| William A. Roper, Jr. | Director | 51 |
| Stratton D. Sclavos | Director | 35 |
| John E. Glancy | Director | 51 |
| J. Robert Beyster | Director | 72 |
| Craig I. Fields | Director | 50 |
| Raymond S. Corson | Senior Vice President, Business Development | 51 |
| David H. Holtzman | Senior Vice President, Engineering | 40 |
| Donald N. Telage | Senior Vice President, Internet Relations and Special Programs Director | 52 |
| Michael G. Voslow | Treasurer | 37 |
| A. Scott Williamson | Vice President, Engineering | 39 |