Will DynaVox IPO Speak to Investors?

Apr.21.10 | About: DynaVox Inc.A (DVOXQ)

DynaVox (DVOX), provider of speech generating devices to assist people with disabilities, is expected to go public this week.

All excerpts are from the most recent S-1 filing.

Business Overview (from prospectus)

We develop and market industry-leading software, devices and content to assist people in overcoming their speech, language or learning disabilities. Our proprietary software is the result of decades of research and development and our trademark- and copyright-protected symbol sets are more widely used than any other in our industry. These assets have positioned us as a leader in two areas within the broader market for assistive technologies—speech generating technologies and special education software. Due to the magnitude and growth of the underserved non-verbal or speech impaired populations in our targeted geographies and the significant and growing portion of the student populations who are classified as having special educational requirements, we believe that there are substantial opportunities for growth within both of these areas.

Offering: 9.4 million shares at $15 - $17 per share. Net proceeds of approximately $150.0 million will be used to purchase newly-issued New Holdings Units from DynaVox Systems Holdings LLC, to repay debt and cover the expenses of the offering.

Lead Underwriters: Piper Jaffray (NYSE:PJC), Jefferies & Co (JEF), William Blair

Financial Highlights:

Net sales increased 36.3%, or $14.1 million, to $52.9 million for the twenty-six week period ended January 1, 2010 from $38.8 million for the twenty-six week period ended December 26, 2008... Gross profit increased 42.0%, or $11.7 million, to $39.7 million for the twenty-six week period ended January 1, 2010 from $28.0 million for the twenty-six week period ended December 26, 2008... Selling and Marketing. Selling and marketing expenses increased 31.0%, or $4.1 million, to $17.5 million for the twenty-six week period ended January 1, 2010 from $13.4 million for the twenty-six week period ended December 26, 2008... Net income increased $4.7 million, to $5.4 million or 10.2% of net sales for the twenty-six week period ended January 1, 2010 from $.7 million or 1.9% of net sales for the twenty-six week period ended December 26, 2008.

Competitors:

We have many competitors in the broader assistive technology and educational software industries. Within our particular areas of speech generating technology and interactive software for students with special educational needs, we believe we are the largest player and have no dominant competitors. However, additional entrants, including larger technology companies and other assistive technology companies, could also choose to compete with us in these areas.

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