| Steri-Oss, Inc. | |||
| Proposed Ticker: | STRI | 22895 Eastpark Drive | |
| Exchange: | NASDAQ-National Market | Yorba Linda, CA 92887 | |
| Industry: | Manufacturing (SIC Code 3843) | (714) 282-6515 | |
| # of Employees: | 232 | ||
| Type of Shares: | Common Shares | Filing Date: | 8/26/97 | |
| U.S. Shares Filed: | 4,700,000 | Filing Range: | $14.00 - $16.00 | |
| Non-U.S. Shares Filed: | 0 | Offering Amount: | $70,500,000 | |
| Primary Shares: | 4,700,000 | Expenses: | $700,000 | |
| Secondary Shares: | 0 | Shares Out After: | 10,933,547 |
| Manager | Tier | Phone |
| Donaldson, Lufkin & Jenrette Securities Corp. | Lead Manager | (212) 371-0641 |
| Furman Selz Incorporated | Co-manager | (212) 309-8285 |
| UBS Securities Inc. | Co-manager | (212) 821-4510 |
| Issuer's Law Firm: | Brobeck, Phleger & Harrison |
| Bank's Law Firm: | Sullivan & Cromwell |
| Registrar/Transfer Agent: | U. S. Stock Transfer Corporation |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $32.20 | $19.33 | $15.74 | Assets: | $83.41 |
| Net Income: | $1.31 | -$2.44 | $1.04 | Curr Assets: | $13.51 |
| EPS: | Liabilities: | -$7,794.31 | |||
| Prior EPS: | -$0.78 | $2.64 | Curr Liabilities: | $8.96 | |
| Cash Flow/Oper: | $5.52 | $3.37 | -$0.81 | Equity: | $7,877.71 |
| Cash Flow/Fin: | $55.53 | -$2.75 | -$1.29 | Cash: | $0.06 |
| Cash Flow/Inv: | -$60.95 | -$2.75 | Working Cap: | $4.55 | |
| Business Description |
| The company is a leading developer, manufacturer and marketer of a broad line of dental implant systems, which include implants, abutments and related surgical instruments. A dental implant is a small titanium screw or cylinder that is surgically placed directly into the jaw and serves as a foundation for a replacement tooth. An abutment is a small titanium attachment that is typically screwed into or onto the implant and connects the artificial tooth to the implant. The Company believes that its dental implant systems are superior to traditional restorative treatments such as bridges and dentures because the permanent nature of dental implants permits patients to regain most of the functionality of their natural teeth. Dental implants also may reduce the progressive atrophy of the jaw often caused by the absence of teeth. The Company has demonstrated the safety and reliability of its implants at success rates of over 96% (representing full integration of the implant with the bone) in seven years of clinical studies involving more than 1,600 implant patients. The Company has experienced significant growth over the last several ears. The Company's net sales increased 22.8% to $19.3 million for the six months ended June 30, 1997 from $15.7 million for the comparable six month period in 1 996. Net sales also increased to $32.2 million for 1996 from $12.7 million for1992, reflecting a five year compounded annual growth rate of 26.1%. The Company's earnings before interest, taxes, depreciation and amortization ("EBITDA") increased 15.3% to $3.3 million for the six months ended June 30, 1997 from $2.9 million for the comparable six month period in 1996. EBITDA also increased to $6.1 million for 1996 from $1.5 million for 1992, reflecting a five year compounded annual growth rate of 42.1%. |
| Competition |
| The dental implant industry is characterized by intense competition. Steri-Oss competes directly with a number of companies offering dental implants and related products both in the United States and abroad, including Nobel Biocare AB, Friatec AG, Implant Innovations, Inc. ("3i") and Sulzer Calcitek Inc., certain of which have substantially greater financial, marketing, sales, distribution and development resources than the Company. Such competitors may be able to devote greater resources to the development, promotion, sale and support of their products than the Company. Certain of the Company's competitors also have established a greater international presence than the Company. In several countries, including Germany and Switzerland, the Company competes with companies that are based in such countries. The competitors' local presence in such markets may provide them with a competitive advantage over the Company. In addition, several competitors in foreign markets sell directly in such markets, which may be more effective than the Company's indirect distribution channels in such markets. Increased competition or the failure to compete effectively in the dental implant industry may result in price reductions, reduced profit margins and loss of market share, all of which could have a material adverse effect on the Company's business, financial condition and results of operations. The Company's products also compete against alternative restorative treatments such as bridges and dentures, which are generally less expensive to the patient, are less invasive and can be implemented more quickly. New restorative technologies may be developed that are as effective as, or more effective or easier to use than, those offered by the Company, which could render the Company's products less competitive or obsolete. |
| Business Plan |
| The Company's objective is to become the leading worldwide developer, manufacturer and marketer of dental implants and related products, while increasing its profitability. The Company believes that over the last three years, it has been one of the fastest growing participants in the United States implant market. Furthermore, as a result of the Company's acquisition of the dental business of Interpore in May 1997, the Company believes its implant unit sales, on a combined basis in the United States in 1996, exceeded those of any of its competitors. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to redeem outstanding Class A, B, and C preferred stock, to repay debt and for general corporate purposes including working capital. |
| Name of Shareholder | % Owned Before | % Owned After |
| The 1818 Fund II, L.P. | 66.60% | 38.00% |
| S-O Management LLC | 12.80% | 7.30% |
| Henry Wendt | 7.00% | 4.00% |
| T. Michael Long | 6.80% | 3.82% |
| S-O Acquisitions LLC | 5.60% | 3.20% |
| Douglas E. Rogers | 5.30% | 3.00% |
| Officer Name | Title | Age |
| Kenneth A. Darienzo | Chairman of the Board and Chief Executive Officer | 58 |
| Kenneth Krueger | Executive Vice President, Operations | 51 |
| Martin J. Dymek | President | 41 |
| Bruce D. Nye | Vice President, Chief Financial Officer and Corporate Secretary | 53 |