This Week's IPOs: CCS Medical Holdings, Cosan Ltd., VMWare, Tully's Coffee

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Includes: CZZ, VMW
by: Abbi Adest

This week's IPOs include: CCS Medical Holdings (CCSM), a medical supply management company; Cosan Limited (NYSE:CZZ), a Brazilian producer of sugar-based ethanol and sugar; VMWare (NYSE:VMW) a provider of virtualization solutions; Tully's Coffee (TULY) a specialty coffee retailer.

All quotations are from the companies' most recent S-1 filings with links provided.


CCS MEDICAL HOLDINGS, INC. (CCSM)

Business Overview (from prospectus)

We are a leading medical supply management company delivering products and value-added services to individuals living with select chronic medical conditions, including diabetes, urological and ostomy-related disorders, chronic wounds, incontinence, respiratory conditions and other illnesses. We employ a differentiated marketing approach using a nationwide field-based sales force that targets healthcare professionals who focus on chronic conditions to expand our extensive relationship-based network. In an effort to promote proper patient compliance with physician prescribed protocols, our medical supply programs educate and counsel patients on disease states and complex clinical regimens, assume responsibility for the patients’ billing and collecting from government programs and third-party payors, and deliver products to patients’ homes through the mail. Our primary product focus is on diabetes, a large and fast growing component of the chronic care market. Products we distribute in the diabetes market include blood glucose testing supplies, insulin pumps and related supplies, and prescription medications.

Offering: 10.0 million shares at $14.00 - $16.00 per share. Net proceeds of approximately $137,818,000 will be used to repay debt.

Lead Underwriters: Lehman Brothers, Goldman Sachs

Financial Highlights:

Net revenues increased by approximately $40.5 million, or 41.9%, from the quarter ended March 31, 2006 [$96,703,000] to the quarter ended March 31, 2007 [$137,227,000] ...Cost of goods sold increased by approximately $19.2 million, or 35.6%, from the quarter ended March 31, 2006[$53,886,000] to the quarter ended March 31, 2007 [$73,055,000]... Operating, selling, general and administrative expenses increased by approximately $2.7 million, or 9.3%, from the quarter ended March 31, 2006 [$28,882,000] to the quarter ended March 31, 2007.

COSAN LIMITED (CZZ)
Business Overview (from prospectus)

We are a leading global ethanol and sugar company in terms of production with low-cost, large-scale and integrated operations in Brazil. Our production is based on sugarcane, a competitive and viable feedstock for ethanol, sugar and energy because of its low production cost and high energy efficiency ratio relative to other ethanol sources, such as corn and sugarbeet.

Offering: 100.0 million shares at $17.04 per share. Net proceeds of approximately US$1,617 million will be used for capital expenditures for new projects, facilities expansion, development, equipment purchases and other investments.

Lead Underwriters: Credit Suisse, Goldman Sachs, Morgan Stanley

Financial Highlights:

Net sales increased by 53.1%, to US$1,679.1 million in fiscal year 2007 from US$1,096.6 million in fiscal year 2006... Cost of goods sold increased by 49.6% to US$1,191.3 million in fiscal year 2007 from US$796.3 million in fiscal year 2006... Cosan had net income of US$346.5 million in fiscal year 2007, compared to a net loss of US$72.8 million in fiscal year 2006.


VMWARE (VMW)

Business Overview (from prospectus)

We are the leading provider of virtualization solutions. Our virtualization solutions represent a pioneering approach to computing that separates the operating system and application software from the underlying hardware to achieve significant improvements in efficiency, availability, flexibility and manageability. Our solutions enable organizations to aggregate multiple servers, storage infrastructure and networks together into shared pools of capacity that can be allocated dynamically, securely and reliably to applications as needed, increasing hardware utilization and reducing spending. We believe that the market opportunity for our virtualization solutions is large and expanding, with 24.6 million x86 servers and 489.7 million business client PCs installed worldwide as of December 2006.

Offering: 33.0 million shares at $27-$29 per share. Net proceeds of approximately $866.2 million will be used to repay debt, to purchase headquarters facilities, for working capital and other general corporate purposes.

Lead Underwriters: Citi, J.P. Morgan, Lehman Brothers

Financial Highlights:

Total revenues increased by $316.8 million, or 82%, in 2006 to $703.9 million [from $387.1 million in 2005]... Our cost of revenues were $123.4, $65.2 and $45.4 in 2006, 2005 and 2004, representing year-over-year increases of 89% in 2006 and 44% in 2005. Our gross profit was $580.5, $321.9 and $173.3 in 2006, 2005 and 2004, respectively, representing year-over-year increases of 80% in 2006 and 86% in 2005... Operating income was $120.6, $93.6 and $35.2 in 2006, 2005 and 2004, respectively, representing a year-over-year increase of 29% in 2006 and 166% in 2005.


TULLY’S COFFEE CORPORATION (TULY)

Business Overview (from prospectus)

Tully’s Coffee is a specialty retailer in the rapidly growing fast-casual categories of specialty coffee, snacks and non-alcoholic beverages, within the broader quick-service restaurant industry. Tully’s is famous for our gourmet hand-craft roasted coffees, wide selection of barista beverages, delicious assortment of breakfast and lunch offerings and anytime snacks, desserts and specialty beverages, and our genuine community coffeehouse experience. In addition, Tully’s also operates as a gourmet coffee roaster and wholesaler in the rapidly growing specialty coffee industry.

Offering: 3.5 million shares at $10.00 - $12.00 per share. Net proceeds of approximately $34.5 million will be used to expand retail operations and repay debt.

Lead Underwriters: KeyBanc Capital, D.A. Davidson

Financial Highlights:

Sales of products increased $8,849,000 or 17.2% to $60,241,000 for Fiscal 2007, as compared to $51,392,000 for Fiscal 2006... Cost of goods sold and related occupancy costs increased $6,964,000, or 25.7%, to $34,061,000 for Fiscal 2007 as compared to Fiscal 2006... we had a loss of $9,754,000 for Fiscal 2007 as compared to the net income of $15,423,000 for Fiscal 2006.