| Box Hill Systems Corp. | |||
| (www.boxhill.com) | |||
| Ticker: | BXH | 161 Avenue of the Americas | |
| Exchange: | New York Stock Exchange | New York, NY 10013 | |
| Industry: | High-Tech (SIC Code 3572) | (212) 989-4455 | |
| Type of Shares: | Common Shares | Filing Date: | 7/23/97 | |
| U.S. Shares: | 5,500,000 | Offer Date: | 9/16/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $12.00 - $14.00 | |
| Primary Shares: | 3,150,000 | Offer Price: | $15.00 | |
| Secondary Shares: | 2,350,000 | Gross Spread: | $1.05 | |
| Offering Amount: | $71,500,000 | Selling: | $0.63 | |
| Expenses: | $625,000 | Reallowance: | $0.10 | |
| Shares Out After: | - |
| Manager | Tier | Phone |
| Salomon Brothers Inc. | Lead Manager | (212) 783-2947 |
| Montgomery Securities | Co-manager | (415) 627-2100 |
| Issuer's Law Firm: | Brock, Fensterstock, Silverstein, McAuliffe & Wade |
| Bank's Law Firm: | Cravath, Swaine & Moore |
| Auditor: | Arthur Andersen |
| Registrar/Transfer Agent: | American Stock Transfer & Trust Co |
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: | $50.03 | $15.23 | $11.10 | Assets: | $22.14 |
| Net Income: | $3.77 | $1.39 | $1.05 | Curr Assets: | |
| EPS: | Liabilities: | $12.90 | |||
| Prior EPS: | $2.40 | $0.22 | Curr Liabilities: | ||
| Cash Flow/Oper: | -$2.20 | $2.35 | $0.19 | Equity: | $9.23 |
| Cash Flow/Fin: | -$2.48 | -$0.05 | -$0.03 | Cash: | $3.35 |
| Cash Flow/Inv: | -$0.28 | Working Cap: | $8.55 | ||
| Business Description |
| The company designs, manufactures, markets and supports high-performance data storage systems for the Open Systems computing environment. The Company's storage solutions encompass a broad range of scalable products and services targeting high-end customers who demand high performance, high availability and the highest level of customer and technical support. The Company has a history of providing storage solutions that meet these requirements by combining extensive design and implementation experience with leading edge technologies. The Company was among the first to develop and successfully commercialize a hot-swappable SCSI Disk Array storage system and a Redundant Array of Inexpensive/Independent Disks ("RAID") storage system for UNIX. In addition, the Company recently introduced the Fibre Box(R), one of the first Fibre Channel storage systems, and is finalizing the development of its X/ORaid(TM) Module, which takes advantage of the new RAID capabilities that are currently being embedded in Fibre Channel drives. Box Hill is also a leader in providing comprehensive "best of breed" backup solutions to the Open Systems marketplace. Demand for the Company's products, which are targeted to the high end of the Open Systems market, is fueled by the rapid proliferation of new data-intensive applications, such as video, the Internet, intranets, multimedia, data warehousing and data mining, as well as the migration of mission-critical applications off mainframe computers. This market is characterized by large capacity UNIX and Windows NT servers operating in multi-platform environments, generally running mission-critical applications. International Data Corporation ("IDC"), an independent market research firm, estimates that the worldwide market for RAID storage systems in UNIX environments will grow at a compounded annual growth rate of 19.3%, increasing from $6.3 billion in 1996 to $12.9 billion in 2000. In addition, IDC estimates that the worldwide market for RAID storage systems in Windows NT environments will grow at a compounded annual growth rate of 34.1%, increasing from $1.3 billion in 1996 to $4.3 billion in 2000. |
| Competition |
| The market for Open Systems storage is intensely competitive. The Company competes primarily with traditional suppliers of computer systems such as Compaq Computer Corporation, Hewlett-Packard Company ("Hewlett-Packard"), Sun Microsystems, International Business Machines Corporation ("IBM"), Data General Corporation and Digital Equipment Corporation, which market storage systems as well as other computer products. The Company also competes against independent storage system suppliers to the high-end Open Systems market, including EMC Corporation, Network Appliance, Inc., Ciprico Inc. and MTI Technology Corporation ("MTI"). In the area of tape backup, the Company competes with suppliers of tape-based storage systems such as Datalink Corporation, MTI and numerous resellers. Many of the Company's current and potential competitors have significantly greater financial, technical, marketing, purchasing and other resources than the Company, and as a result, may be able to respond more quickly to new or emerging technologies and changes in customer requirements, or devote greater resources to the development, promotion and sale of products than the Company, or to deliver competitive products at a lower end-user price. The Company also expects that competition will increase as a result of industry consolidations. Current and potential competitors have established or may establish cooperative relationships among themselves or with third parties to increase the ability of their products to address the needs of the Company's prospective customers. Accordingly, it is possible that new competitors or alliances among competitors may emerge and rapidly acquire significant market share. Increased competition may result in price reductions, reduced operating margins and loss of market share, any of which could have a material adverse effect on the Company's business, operating results or financial condition. |
| Business Plan |
| The company's objective is to continue its growth and enhance its position as a leading independent provider of staorage solutions to the Open Systems marketplace. To achieve this objective, the company plans to build upon its record of successfully introducing and commercializing new products and technologies that address the evolving data storage needs of its high-end customer base. Key elements of this strategy are: (I) Maintain Technological Leadership and Innovation, (ii) Focus on High-End Markets in Target Industries, (iii) Expand Geographically, (iv) Focus on Direct Sales to End Users and (v) Develop Relationships with OEM Customers. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used principally to fund the company's grwoth and expansion plans, increase working capital and for general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Carol Turchin | 66.70% | |
| Benjamin Monderer | 66.70% | |
| Mark A. Mays | 33.30% |
| Officer Name | Title | Age |
| Benjamin Monderer | Chiarman of the Board, President and Chief Technical Officer | 39 |
| Philip Black | Chief Executive Officer and Director | 42 |
| R. Robert Rebmann, Jr. | Chief Financial Officer and Treasurer | 32 |
| Carol Turchin | Executive Vice President and Director | 35 |
| Adam T. Temple | Vice president - Operations | 39 |
| Kenneth Pitz | Vice President -- Materials Management | 45 |
| Warren J. Fisher | Vice President -- Sales | 40 |
| Mark A. Mays | Vice President, Secretary and Director | 34 |