CurrentOfferings.com Story:

SiRF goes public

By Carolyn Said, San Francisco Chronicle, April 17, 2004

San Jose's SiRF Technology Inc., which designs chips to pinpoint the location of everything from cell phones to cars, plans an initial public offering next week to raise up to $84 million.

SiRF's chips rely on global positioning satellite technology, which uses satellite signals to precisely identify locations anywhere on the planet. Manufacturers use SiRF's chipsets in car navigation systems, cellular phones, portable PCs, entertainment systems and handheld devices, the company said on its Web site.

SiRF and its rivals have a growing and dependable customer base among phone manufacturers. The Federal Communication Commission's E911 mandate, which takes effect late next year, requires that phone carriers enable emergency operators to quickly locate people who dial 911 from their cell phones. Many manufacturers have chosen to meet this requirement by embedding GPS chips in their handsets.

"The GPS market is red hot," said Tom Taulli, author of "Investing in IPOs" and a portfolio manager at Oceanus Value Fund in Newport Beach. "There's nothing like the government making sure you have customers."

Taulli called SiRF "a high-quality company with growth potential and current good numbers."

Rick Osgood, chairman of San Francisco's Pacific Growth Equities, which has no involvement in the IPO, said, "I think they're a very good company that will be very well received. It's a technology that's being used more and more; it's differentiated and the growth rate is pretty compelling."

Of course, Osgood said, being well received on Wall Street these days means an IPO that gets within its price range, not one that soars on the first day, as was once the case. "First-day responses are more muted in general," he said.

SiRF will offer 10 million shares, priced at $10 to $12 each. The company plans to sell 7 million shares itself, while its investors will offer another 3 million shares. Communications chipmaker Conexant Systems, which SiRF bought in 2001, owns 22.9 percent of SiRF and expects to sell more than 1.9 million of its shares in the IPO.

The company has filed to trade on Nasdaq under the ticker symbol SIRF. The acronym stands for silicon radio frequency.

After seeing its sales double or more annually for the past three years, SiRF turned a profit in 2003, according to its filings with the Securities and Exchange Commission.

The company had $3.56 million in net profit on sales of $73.1 million in 2003, the filing said. In 2002, it lost $12.5 million on sales of $30.3 million. In 2001 it lost $23.7 million on sales of $15 million.

SiRF had 152 employees in 2003, according to Hoover's Company Profiles.

SiRF said that 87 percent of its business comes from 10 customers. Its leading customers are Motorola, accounting for 15 percent of its revenue; Leadtek Research (12 percent), Flextronics (12 percent), Siemens Automotive (11 percent) and Promate Electronics (10 percent).

The company, which was founded in 1995, originally filed to go public in October 2000, shortly after the dot-com bubble burst on Wall Street.

Morgan Stanley, Credit Suisse First Boston, Deutsche Bank Securities and Thomas Weisel Partners are underwriting the IPO.