Smith-Garner Associates Inc. –

DELRAY BEACH, Fla. Smith-Garner & Associates Inc., a developer of direct marketing and e-commerce software solutions, held an initial public offering January 29. The company offered 4.41 million shares at $12 apiece, above its $9 to $11 filing range.

The IPO, underwritten by BT Alex. Brown and SoundView Technology Group, left 11.52 million shares outstanding.

Selling shareholders, which did not include venture backers TA Associates and Chesnut Hill Capital International III, sold 410,000 shares.

Smith-Garner, founded in 1988, provides software and related hardware and services to retail marketers without “brick-and-mortar” retail locations. The company’s clients include direct marketers, Internet retailers, manufacturers, fulfillment houses and other retailers with significant non-store sales channels. Smith-Garner’s MACS software products are designed to automate non-store commerce activities, including advertising analysis, sales, telemarketing, ordering, merchandising, procurement, e-commerce, warehousing, shipping, accounting and systems operation.

The net proceeds to the company for its sale of 4 million shares were approximately $43.9 million, which will be used repay debt, enhance sales and marketing resources and for international expansion.

The company was profitable in the first nine months of 1998, earning $2.40 million after losing $3.37 million in 1997 and $2.45 million in 1996.

Jacqueline Morby, a managing director of TA Associates, became a director of the company upon the completion of the offering.

Smith-Garner & Associates – Selected Financial

(in thousands, except per share data)

Year Ended December 31, Nine Months Ended September 30,

1993 1994 1995 1996 1997 1997 1998

Revenue 19,669 21,465 24,929 18,529 18,652 15,093 24,749

Net income (loss) 4,352 3,717 1,663 -2,450 -3,368 -1,211 2,402

Net income (loss) per share 0.83 0.71 0.32 -0.47 -0.64 -0.23 0.46