Prospectus Summary
This summary highlights information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in our common stock. You should read this entire prospectus carefully.
Except as otherwise indicated, all references to the number of outstanding shares of common stock are based on shares outstanding as of March 31, 1999 and assume no exercise of the underwriters' over-allotment option and the conversion of each outstanding share of convertible preferred stock into one share of common stock immediately prior to the closing of this offering . In addition, the information in this prospectus assumes that the initial public offering price will be $ per share, the midpoint of the range disclosed on the cover of this prospectus.
NetIQ Corporation
We are a leading provider of performance and availability management software for Microsoft Windows NT-based systems and applications. As use of the Windows NT platform in distributed computing and Internet environments continues to expand, organizations are increasingly relying on this platform to deploy business-critical applications such as Microsoft Exchange Server, Lotus Domino/Notes, Oracle, Citrix WinFrame, Microsoft Internet Information Server and Microsoft SQL Server. As a result, organizations are facing new challenges in managing their distributed Windows NT environments. Our NetIQ AppManager Suite enables organizations to address these challenges by providing a comprehensive and automated solution that helps optimize the performance and availability of business-critical Windows NT-based systems and applications and reduce associated support costs. AppManager's scalable, multi-tier architecture supports rapid growth in the number of servers and applications deployed in organizations' distributed Windows NT environments and provides close integration with existing system, network and hardware management solutions. We believe that AppManager's comprehensive functionality, coupled with its ease of use resulting from its utilization of familiar Microsoft technology and standards, offers a superior solution for managing systems and applications in distributed Windows NT environments.
Our products are used by organizations in a wide variety of industries and computing environments. As of March 31, 1999, we licensed our AppManager products to more than 375 customers, including AT&T, Charles Schwab & Co., Countrywide Home Loans, Dell Computer, EDS, General Electric, Georgia-Pacific, Glaxo Wellcome, MCI, Microsoft, Nasdaq, NationsBank, Nordstrom Information Systems, Pfizer, Salomon Smith Barney, Shell Services International, Southern Company Services, the Department of Veterans Affairs and Wells Fargo Bank N.A. We sell our products through our sales force, which includes our field and inside sales personnel, as well as through indirect channels, such as distributors, value-added resellers and original equipment manufacturers. We have established product-based relationships with Citrix, Compaq, Computer Associates, Dell Computer, Hewlett-Packard, IBM, including both its Lotus and Tivoli subsidiaries, Microsoft and Oracle. As part of these relationships, we often develop joint marketing programs with these software and hardware vendors.
Our objective is to be the leading provider of performance and availability management software for Windows NT-based systems and applications. Key elements of our strategy include enhancing our technology leadership position, targeting enterprise-wide deployment of our AppManager products within our substantial customer base, expanding our distribution channels, increasing our international presence and expanding our relationships with Microsoft.
We were incorporated in California in June 1995 and expect to complete a reincorporation into Delaware in June 1999. Our principal executive offices are located at 5410 Betsy Ross Drive, Santa Clara, California 95054, and our telephone number is (408) 330-7000. Our Web address is www.netiq.com. Information contained on our Web site does not constitute part of this prospectus.
The Offering
Common stock offered........................ shares Common stock to be outstanding after this offering................................... shares Use of proceeds............................. For working capital, capital expenditures, repayment of certain indebtedness and potential strategic investments or acquisitions. See "Use of Proceeds." Proposed Nasdaq National Market symbol...... NTIQ Please see "Capitalization" for a more complete discussion regarding the outstanding shares of common stock, securities to purchase common stock and other related matters.
Summary Consolidated Financial Information The pro forma consolidated balance sheet data summarized below gives effect to the conversion of outstanding preferred stock into common stock upon completion of this offering. The pro forma consolidated balance sheet data also reflects the repayment of a $5.0 million promissory note plus accrued interest and the application of the net proceeds received in connection with the presumed exercise of a warrant. See "Capitalization," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Capital Stock" for further information regarding this warrant and the promissory note. The pro forma as adjusted consolidated balance sheet data summarized below reflects the application of the net proceeds from the sale of the shares of common stock offered by NetIQ at the initial public offering price of $ and after deducting the underwriting discounts and commissions and estimated offering expenses.
Nine Months
Year Ended June 30, Ended March 31,
1996 1997 1998 1998 1999
(in thousands, except per share data)
Consolidated Statement of Operations Data: Revenue.......................... $ -- $ 388 $ 7,070 $ 3,420 $15,109 Gross profit..................... -- 333 6,428 3,058 13,683 Loss from operations............. (1,006) (2,397) (3,373) (3,081) (590) Net loss......................... (909) (2,281) (3,111) (2,866) (501) Basic and diluted net loss per share........................... $ (1.03) $ (1.07) $ (0.89) $ (0.87) $ (0.10) Shares used to compute basic and diluted net loss per share...... 881 2,122 3,496 3,299 4,993 Pro forma basic and diluted net loss per share.................. $ (0.21) $ (0.03) Shares used to compute pro forma basic and diluted net loss per share........................... 14,596 16,093
March 31, 1999 Pro Forma Actual Pro Forma As Adjusted (in thousands)
Consolidated Balance Sheet Data: Cash and cash equivalents........................ $11,565 $ $ Working capital.................................. 5,076 Total assets..................................... 17,613 Long term obligations, less current portion...... 241 Total stockholders' equity....................... 5,971