PROSPECTUS SUMMARY
This Prospectus contains certain statements of a forward-looking nature
relating to future events or the future financial performance of the Company.
Prospective investors are cautioned that such statements are only predictions
and that actual events or results may differ materially. In evaluating such
statements, prospective investors should specifically consider the various
factors identified in this Prospectus, including the matters set forth under
the caption "Risk Factors," which would cause actual results to differ
materially from those indicated by such forward-looking statements. The
following summary is qualified in its entirety by the more detailed information
and financial statements, including notes thereto, appearing elsewhere in this
Prospectus.
THE COMPANY
Interlink Computer Sciences, Inc. ("Interlink" or the "Company") is a leading
supplier of high-performance solutions for enterprise networked systems
management. Interlink provides software and services which enable customers
implementing client/server systems to use their IBM and IBM-compatible MVS
mainframes as "enterprise servers" in distributed, heterogeneous client/server
network environments. The Company's products and services enable customers to
transport, access and manage mission-critical data and applications across
distributed network environments. The Company develops and markets the
TCPaccess products which provide for enterprise server TCP/IP connectivity,
fault tolerance and CICS-to-LAN application integration. Interlink also
develops and markets the HARBOR products for network backup, archive and
restore, and for application, data and software distribution. The Company also
supplies network printing and other applications which expand the functionality
of the enterprise server.
Many large organizations depend on centralized mainframe computer systems to
manage mission-critical software applications and to serve as the repository
for essential business data. Recently, advances in hardware, software, and
networking technologies have led to the deployment of client/server systems, in
which computing tasks are distributed throughout a network of computers.
Organizations are now integrating mainframe computers into client/server
networks as "enterprise servers" which, like other servers on the client/server
network, have a specialized purpose and function. Specifically, the enterprise
server and the systems management applications associated with its use have
proven capable of providing reliable and efficient systems management, data
security, and distribution of data and applications. Improvements in the cost-
effectiveness of mainframe systems have significantly increased the use of
mainframe computers as enterprise servers.
With almost ten years of experience in the networked systems management
industry, Interlink provides networking solutions that build upon its expertise
in the integration of the MVS operating system with TCP/IP and its reputation
for high-performance, efficient products. Interlink's objective is to enhance
its position as a leading supplier of high-performance solutions for enterprise
networked systems management. Key elements of the Company's strategy include:
supplying a suite of products that expand the functionality of the enterprise
server; leveraging the combined existing customer bases of TCPaccess and HARBOR
and capitalizing on new sales opportunities; employing a consultative sales
approach to build long-term customer relationships; differentiating its
networking solutions through superior customer support; and leveraging
strategic marketing and development relationships in order to provide complete
solutions to its customers' evolving network systems management needs.
As of March 31, 1996, the Company had licensed its TCPaccess and HARBOR
products to approximately 900 and 160 customer sites worldwide, respectively.
The Company markets and sells its software and services primarily through its
direct sales organization and, to a lesser extent, through resellers and
international distributors. The Company's major customers include, among
others, the Internal Revenue Service, MACIF, U.S. Sprint, W.R. Grace & Co. and
Wells Fargo Bank.
The Company recently formed a strategic relationship with Legato Systems,
Inc. ("Legato") to develop products which will enable the companies to provide
enterprise-class storage management solutions. Pursuant to the terms of the
agreement, Interlink intends to develop a new product called HARBOR Agent for
Networker (Legato's client/server storage management product) which will be
distributed by Legato. Interlink will be an authorized reseller of Legato's
storage management products, including HARBOR Agent for Networker.
On December 29, 1995, the Company acquired New Era Systems Services Ltd.
("New Era") and its HARBOR product line in exchange for cash and notes payable
totaling $12.4 million and warrants to purchase 700,000 shares of its Common
Stock with additional contingent earnout payments totaling up to $5.2 million
due January 31, 1997 and 1998.
Interlink was incorporated under the laws of the state of California in
December 1985. The Company will reincorporate in Delaware prior to the
completion of this offering. Unless the context otherwise requires, references
in this Prospectus to "Interlink" and the "Company" refer to Interlink Computer
Sciences, Inc., a California corporation, and its Delaware successor, together
with their subsidiaries. The Company's principal executive offices are located
at 47370 Fremont Boulevard, Fremont, California 94538, and its telephone number
is (510) 657-9800.
THE OFFERING
Common Stock Offered by the Company............. 2,000,000 shares
Common Stock Offered by the Selling Stockholders.2,000,000 shares
Common Stock Outstanding after the Offering..... 9,557,249 shares (1)
Use of Proceeds................................. For repayment of
indebtedness, capital
expenditures, working capital
and other general corporate
purposes.
Proposed Nasdaq National Market symbol.......... INLK
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
NINE MONTHS
ENDED PRO FORMA FOR
YEAR ENDED JUNE 30, MARCH 31, ACQUISITION (2)
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NINE MONTHS
YEAR ENDED ENDED
1991 1992 1993 1994 1995 1995 1996 JUNE 30, 1995 MARCH 31, 1996
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STATEMENTS OF OPERATIONS DATA:
Revenues............... $27,762 $23,326 $21,185 $21,875 $27,079 $18,538 $23,702 $29,954 $26,191
Gross profit........... 21,440 16,995 17,119 18,065 20,470 13,836 18,100 22,915 20,302
Purchased research and
development and product
amortization...... -- -- -- -- -- -- 10,318 640 480
Operating income
(loss)................ (953) (4,935) 2,167 844 104 (1,256) (7,744) (1,636) 3,009
Net income (loss)...... (1,941) (5,864) 2,902 1,667 1,647 (1,356) (7,897) (450) 2,533
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Net income (loss) per
share (3)............. $ (0.90) $ (2.73) $ 0.59 $ 0.22 $ 0.17 $ (0.22) $ (1.26) $ (0.07) $ 0.26
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Shares used in per
share calculation (3). 2,145 2,145 4,945 7,616 9,628 6,206 6,250 6,217 9,770
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MARCH 31, 1996
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AS
ACTUAL ADJUSTED (4)
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BALANCE SHEET DATA:
Working capital (deficit)................................ $(6,320) $11,380
Total assets............................................. 24,158 41,858
Long-term debt, less current portion..................... 3,310 3,310
Total stockholders' equity (deficit)..................... (5,050) 12,650
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(1) Represents shares outstanding as of March 31, 1996. Excludes as of March
31, 1996: (i) options outstanding to purchase up to 2,015,455 shares of
Common Stock at a weighted average exercise price of $0.55 per share under
the Company's 1992 Stock Option Plan; (ii) 988,334 shares of Common Stock
issuable upon exercise of warrants outstanding at a weighted average
exercise price of $1.48 per share; (iii) 74,171 shares of Common Stock
reserved for issuance under the Company's 1992 Stock Option Plan and (iv)
12,000 shares of Common Stock reserved for issuance pursuant to a prior
acquisition. See "Management--Stock Plans," "Description of Capital Stock"
and Note 7 of Notes to Consolidated Financial Statements. Also excludes
2,300,000 shares reserved after March 31, 1996 for issuance under the 1992
Stock Option Plan, 1996 Director Option Plan and the Employee Stock
Purchase Plan.
(2) Pro forma to give effect to the Company's acquisition of New Era Systems
Services Ltd. in December 1995 as if such acquisition had taken place as of
July 1, 1994. See Notes 1 and 2 of Notes to Unaudited Pro Forma Combined
Condensed Consolidated Financial Statements.
(3) See Note 1 of Notes to Consolidated Financial Statements for a discussion
of the computation of net income (loss) per share.
(4) Adjusted to reflect the sale of the 2,000,000 shares of Common Stock
offered by the Company hereby at an assumed initial public offering price
of $10.00 per share, and after deducting underwriting discounts and
commissions and the estimated expenses of the offering, and the anticipated
application of the estimated net proceeds therefrom. See "Use of Proceeds"
and "Capitalization."
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Enterprise Print Services, SNS and the Interlink logo are registered
trademarks of the Company and TCPaccess, TCPaccess Fault Tolerant, Interlink
3762 Network Controller, SNS/NFS, SNS/TCPaccess, Interlink 3700 Series Network
Controller, CICS Programmers Toolkit, and HARBOR are trademarks of the Company.
This Prospectus also contains trademarks and tradenames of other companies.
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Except as otherwise indicated, all information contained in this Prospectus
(i) assumes that the Underwriters' over-allotment option is not exercised, (ii)
reflects an increase in the authorized shares of Common Stock to 25,000,000
shares which will occur prior to this offering, (iii) gives effect to the
reincorporation of the Company from California to Delaware which will occur
prior to this offering, (iv) reflects the conversion of all outstanding shares
of Preferred Stock into 2,459,000 shares of Common Stock, which will occur
automatically upon the closing of this offering, (v) reflects the filing, upon
the closing of this offering, of the Company's Restated Certificate of
Incorporation authorizing 5,000,000 shares of undesignated Preferred Stock, and
(vi) reflects the net exercise of outstanding warrants to purchase 150,000
shares on a net basis and the reduction of an outstanding warrant to purchase
162,500 shares to 125,000 shares, which will both occur upon the closing of
this offering. See "Description of Capital Stock," "Underwriting" and Note 7 of
Notes to Consolidated Financial Statements.