Newegg.com hatches a public offering

After months of non-activity, the market for initial public offers is heating up. Just days after Vitacost.com announced plans to go public, another and even bigger online retailer – Newegg Inc. – also plans an initial offering.

Newegg, No. 9 in the Internet Retailer Top 500 Guide, is looking to raise $175 million through a public offering from the sale of up to 14.1 million shares at a minimum of $12.36 per share. The company, which carries an online inventory of more than 33,000 products and has been selling on the web since 2001, will use the proceeds for general expansion, including $25 million to build an Asian headquarters and a regional warehouse, fund operating expenses in China and improve the logistics infrastructure of its Canadian operations.

Newegg.com also will use $8.6 million to repay existing loans. Other expansion plans include building out its information technology infrastructure, launching third party e-commerce fulfillment and marketing service platforms, and increasing its product and shipping promotional activities, the company says in its registration filing with the U.S. Securities and Exchange Commission.

Newegg is a profitable online retailer, according to the registration filing. For the first six months of the year:

• Sales increased 7.8% to $1.11 billion from $1.03 billion.
• Sales in North America grew 2.9% from $1.02 billion to $1.05 billion.
• Sales in China increased 328.3% to $54.4 million from $12.7 million.
• Net income increased 21.5% to $15.8 million from $13 million.
• Advertising and marketing expenses increased 23.1% to $12.8 million from $10.4 million.
• Selling, general and administrative expenses increased 4.5% to $93.3 million from $89.3 million.
• The number of active customers increased 24.2% to 4.1 million from 3.3 million.

• Sales increased 13.4% from $1.86 billion in 2007 to $2.11 billion.
• Sales in North America grew year over year from $1.85 billion to $2.08 billion.
• Net income increased 54.0% to $28.8 million from $18.7 million.
• Sales of I.T. products in the U.S. grew 9.4% from $1.59 billion in 2007 to $1.74 billion.
• Consumer electronic product sales in the U.S. grew 30.8% from $175.5 million in 2007 to $229.7 million.
• Selling, general and administrative expenses increased 13.1%, from $162.4 million in 2007 to $183.7 million.