The prospectus for data warehouser Red Brick Systems Inc, which just filed to go public with an offer of 1.8m shares at $8 to $10 a share (CI No 2,830) to raise around $14.3m, shows that the main shareholders, present directors and officers will retain 72% of the company, book value for which was $3.53m at September 30. Although it has not had a profitable year out of the last five, Red Brick managed to paint its way out of the red by the third quarter of 1994 when business began to take off, showing a profit of $14,000 on turnover of $1.38m. It’s had four consecutive quarters in the black since. It showed a loss of $1.49m on $4.79m turnover for the first three quarters of 1994 to end-September and a loss of $1.48m on turnover of $8.50m for the year as a whole. The company showed a profit of $180m on turnover of $14.35m for the first three quarters of 1995. At that time its accumulated debt stood at $12.5m. Most of its turnover is derived from Red Brick Warehouse licences; research and development spending was $1.6m, $2.2m and $2.8m – or 92.4%, 84.2% and 33.5% – as a percentage of total turnover in 1992, 1993 and 1994 respectively. There were no international sales in 1992 or 1993; less than 10% of sales (attributable to one customer, Hewlett-Packard Co) were made overseas in 1994. The 10% of sales made internationally to end-September were to nine customers.
Foreign operations
Red Brick plans to establish additional foreign operations (it has one person at a UK sales operation), hire personnel (it has 296 employees) and recruit resellers and value-added resellers to drive its international business up. Red Brick is still dependent on a small number of resellers and customers; 1992 sales to Sequent Computer Systems Inc accounted for 59% of sales. Sales to NCR Corp and Hewlett-Packard accounted for 36% and 19.5% of turnover in 1993. 1994 sales to Digital Equipment Corp and efficient market services inc – a Chicago-based point-of-sale data consolidation company that insists on spelling its name in lower case – accounted for 12% and 11% of turnover. Sales to Unisys Corp up to the end of September 1995 accounted for 26% of turnover, NCR 12% and efficient a further 12%; 60% in total. The company expects the Unisys arrangement to account for a high percentage of turnover for the foreseeable future. Unisys’s decision support group decided to make Red Brick the key data mining technology offering for its U6000 Unix servers and is currently importing the software to its Intel Corp Scalable Parallel Processor-based Opus massively parallel system. Red Brick says it will also expand its reseller channel. The company lists its chief competitors as Oracle Corp, Informix Corp, Sybase Inc, IBM Corp and NCR now, and fully expects other entrants to join this number. Its warehouse products are priced from $11,000 to $625,000; communications software from $100 to $70,000 and administration tools from $4,000 to $80,000. It offers Sybase’s Open Client gateway as a front-end to additional third party development tools, as well as an Open Data Base Connectivity option. A Warehouse for the Web Toolkit is close to launch; it will have tools to access warehouse information from Web browsers. Red Brick has a new vice-president marketing, Chris Grejtak, one-time president of IBM’s Metaphor Inc.
