Prospectus Summary
This summary highlights selected information contained elsewhere in this prospectus. You should read the entire prospectus carefully before making an investment decision. This prospectus contains forward looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward looking statements as a result of the factors described under "Risk Factors" and elsewhere in this prospectus.
OPNET Technologies, Inc.
We provide predictive network management software solutions that enable our customers to optimize the performance and maximize the availability of communications networks and networked applications. Our suite of products advances network and application management beyond reactive problem identification and reporting to proactive problem resolution and avoidance. The OPNET product suite combines predictive simulation and a comprehensive understanding of network technologies to enable network professionals to more effectively design and deploy networks, diagnose network and application performance problems, and predict the impact of proposed network modifications.
Organizations are becoming increasingly reliant upon their networks and applications to successfully execute their business strategies. The design, operation, and management of these networks are becoming more complex, and service providers and enterprises must now manage the convergence of data, voice, and video traffic over wireline and wireless architectures, integrating numerous existing and emerging technologies. As the complexity of networks continues to increase, so does the need for sophisticated solutions to manage network resources effectively.
Our OPNET product suite consists of three primary software solutions: OPNET IT DecisionGuru, OPNET Modeler, and OPNET Netbiz. OPNET IT DecisionGuru enables service providers and enterprises to more effectively design and deploy networks and to predict the performance of their networks and applications. OPNET Modeler enables network equipment manufacturers to accelerate the design and development of network equipment and communication protocols. OPNET Netbiz facilitates and accelerates the sales process for service providers and network equipment manufacturers by automating network design and proposal generation. In addition, we provide comprehensive libraries of models of a wide range of network technologies and communication protocols to enable our products to simulate and analyze networks and applications.
Using our simulation-based products, our customers are more quickly and cost-effectively able to:
. design, deploy, and operate new networks, network services, and network equipment;
. adapt their existing network infrastructure and network services to meet their business-critical performance objectives;
. proactively identify and avoid network and application performance problems;
. define achievable performance and availability requirements for network services and applications, commonly known as service level agreements; and . streamline the sales process for network services and network equipment.
We sell our products through our direct sales force, our international distributors, and original equipment manufacturers and resellers. We market our products to service providers, such as telecommunications carriers, Internet service providers, or ISPs, and application service providers, or ASPs, large and medium-sized enterprises, and network equipment manufacturers. Since inception, we have sold our products to over 500 customers, including service providers, such as AT&T, British Telecom, MCI WorldCom, SBC Communications, Sprint, UUNET Technologies, and Vodafone Airtouch; enterprises, such as Boeing, IBM, National Semiconductor, RR Donnelley, and Texas Utilities; and network equipment manufacturers, such as 3Com, Cisco Systems, Ericsson, Motorola, Nokia, and Nortel Networks.
We intend to enhance our leadership position in the expanding market for predictive network management software solutions by:
. increasing penetration of the service provider market;
. expanding our direct and international sales efforts;
. leveraging our existing customer base;
. introducing new products and enhancing the functionality of existing products; and . developing additional strategic relationships.
Our corporate offices are located at 3400 International Drive, N.W., Washington, D.C. 20008 and our telephone number is (202) 364-4700. Our predecessor was incorporated in Maryland under the name MIL 3, Incorporated on November 1, 1986, and we incorporated in Delaware on November 23, 1988 under the same name. We changed our name to OPNET Technologies, Inc. on February 2, 2000. Our Web address is www.opnet-tech.com. We do not intend the information on our Web site to constitute part of this prospectus.
Except as otherwise indicated, information in this prospectus:
. reflects a -for- stock split of all outstanding shares of our common stock to be effected prior to the completion of this offering;
. gives effect to the conversion of all outstanding convertible preferred stock into an aggregate of shares of our common stock, which will occur automatically upon the completion of this offering;
. assumes our common stock will be sold at $ per share, which is the mid-point of the range shown on the cover of this prospectus; and . assumes the underwriters do not exercise their over-allotment option to purchase additional shares in this offering.
The Offering
Common stock offered by OPNET....................... shares Common stock to be outstanding after this offering.. shares Use of proceeds..................................... For general corporate purposes, including working capital and capital expenditures. See "Use of Proceeds." Proposed Nasdaq National Market symbol.............. OPNT The number of shares to be outstanding after this offering excludes:
. shares of common stock issuable upon the exercise of outstanding
stock options at a weighted average exercise price of $ per share;
and
. shares of common stock reserved for future issuance under our stock plans.
Summary Consolidated Financial Data The following table is a summary of the financial data for our business. You should read this information together with our consolidated financial statements and the related notes appearing at the end of this prospectus and the information under "Management's Discussion and Analysis of Financial Condition and Results of Operations." The pro forma balance sheet data gives effect to the conversion of all our outstanding convertible preferred stock into shares of our common stock, which will occur automatically upon the completion of this offering. The pro forma as adjusted balance sheet data also reflects the sale of the common stock offered by us, after deducting estimated underwriting discounts and estimated offering expenses payable by us. See note 1 to our consolidated financial statements for information regarding shares used in computing basic and diluted net income (loss) applicable per common share.
Nine Months
Ended
Year Ended March 31, December 31,
1995 1996 1997 1998 1999 1998 1999
(in thousands, except per share data)
Statement of Operations Data: Total revenues.......... $4,892 $5,989 $8,615 $11,929 $12,003 $8,348 $13,451 Gross profit............ 4,345 5,331 7,607 10,514 10,621 7,380 10,928 Income (loss) from operations............. 1,596 1,360 2,505 2,590 (269) (533) 192 Net income (loss)....... 997 872 1,492 1,775 207 (30) 337 Net income (loss) applicable to common shares................. 997 872 1,492 1,766 193 (41) 326 Basic net income (loss) applicable per common share.................. $ 0.09 $ 0.11 $ 0.19 $ 0.24 $ 0.03 $(0.01) $ 0.05 Diluted net income (loss) per common share.................. $ 0.09 $ 0.11 $ 0.19 $ 0.21 $ 0.02 $(0.01) $ 0.04 March 31, 1999 Pro Forma Actual Pro Forma As Adjusted (in thousands)
Balance Sheet Data: Cash and cash equivalents......................... $ 6,414 $ 6,414 Working capital................................... 6,806 6,806 Total assets...................................... 13,205 13,205 Total stockholders' equity........................ 2,737 9,671