BANYAN SYSTEMS ANNOUNCES SECOND QUARTER RESULTS.

WESTBORO, Mass.--(BUSINESS WIRE)--July 24, 1995--Banyan Systems Incorporated (NASDAQ:BNYN) today announced that revenues for the second quarter ending June 30, 1995 were $30.2 million, compared with $37.1 million for the same period one year ago. For the second quarter of 1995, Banyan reported a net loss of $3,292,000, or $0.20 per share, compared with net income of $4,001,000, or $0.22 per share, in 1994.

For the six months ended June 30, 1995, Banyan reported net income of $265,000, or $0.01 per share, compared with a loss of $3,639,000, or $0.21 per share for the same period in 1994. Results in 1994 include the impact of a one-time charge of $10,916,000, after taxes, due to the acquisition of Beyond Incorporated in the first quarter of 1994. Excluding that one-time charge, Banyan's net income for 1994's first six months was $7,277,000, or $0.40 per share. Revenues for the six months were $70.5 million, compared with $70.2 million in the first half of 1994.

David C. Mahoney, chairman and chief executive officer, said, "As stated previously, several factors affected our second-quarter performance: lower than expected sales of VINES and ENS products; longer sales cycles due to extended operating system and hardware platform evaluations; and a transition in our sales leadership. We remain concerned about the factors that affected our second-quarter results, and expect these to continue to impact our results for the balance of 1995."

Software revenues for the second quarter were $24.3 million, compared with $30.2 million for the same period last year. Geographically, Banyan's international revenues for the quarter were $7.1 million, compared with $7.4 million for 1994's second quarter. Second-quarter sales in the Asia/Pacific region increased to $2.5 million from $1.2 million last year.

Commenting on Banyan's international business, Mahoney stated, "While revenues in Europe were lower than expected during the second quarter, we have broadened platform support to include key regional computing platforms, such as Siemens' RM600, and introduced French, German and Spanish versions of BeyondMail. We are pleased with our growth during the quarter in the Asia/Pacific region. In addition to steadily increasing revenues in this region, we also expanded support for our business in Japan as NTT Advanced Technology, a subsidiary of Nippon Telegraph and Telephone, recently purchased a minority interest in our Nihon Banyan Systems KK subsidiary. This relationship, coupled with previously announced partnerships with Marubeni and Hitachi, further increases our presence in a region where strategic alliances have become particularly important in reaching new customers.

"During the quarter, we gained critical industry support for our Universal StreetTalk initiative to enable software and hardware developers to leverage the capabilities of our proven directory service royalty free," Mahoney added. "Not only did we begin delivery of Universal StreetTalk, but a growing list of industry leaders such as Cisco, Collabra, Oracle, SAP, Sybase, and VMARK Software recently announced their intentions to incorporate our technology into future product offerings. To guide our future product direction and development efforts, we unveiled REDWOOD, our three-year vision to enable organizations to find, share and manage information in the emerging extended enterprise marketplace. We are encouraged by the initial response to this compelling vision from our customers, strategic partners and industry experts."

Mahoney concluded, "With the arrival of John Curtis as our senior vice president of Worldwide Sales, which broadens our management team, we are focused on capitalizing on our global opportunities. We also will continue to leverage our mission-critical directory and messaging capabilities in our effort to bring our REDWOOD vision to the commercial marketplace."

Under the Company's previously announced stock repurchase program, Banyan repurchased 493,500 shares of its common stock in open market transactions during the second quarter of 1995, increasing the year-to-date total number of shares repurchased to 733,000. It is the Company's intention to acquire up to one million shares of its common stock for use in its Stock Incentive and Employee Stock Purchase Plans, and similar corporate purposes.

The consolidated statements of operations and condensed balance sheets follow.

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About Banyan Systems Incorporated:

Banyan Systems (NASDAQ:BNYN) is a pioneer and leader in enterprise network services. These products make it easy to find, share and manage information and resources within enterprise networks. Founded in 1983 and headquartered in Westboro, Massachusetts, USA, the company markets products worldwide through authorized network integrators, resellers and international distributors. Banyan can be reached on the World Wide Web at http.banyan.com.

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Consolidated Statements of Operations
(In thousands, except per share amounts)

                                 Three months ended   Six months ended
                                       June 30,            June 30,
                                  1995       1994     1995      1994
                                    (Unaudited)         (Unaudited)
Revenues:
   Software                     $24,342    $30,163  $58,021   $56,108
   Hardware                         603      2,384    1,955     4,571
   Support and training           5,209      4,558   10,527     9,489
       Total revenues            30,154     37,105   70,503    70,166

Cost of related revenues          7,020      7,354   14,704    14,640

Gross margin                     23,134     29,751   55,799    55,526
   %                                 77%        80%      79%       79%

Operating expenses:
   Sales and marketing           19,968     15,701   38,691    29,411
   Product development            5,850      4,992   11,556     9,536
   General and administrative     2,969      3,104    6,158     5,836
   Purchased research and
    development                      --         --       --    17,606-a
       Total operating expenses  28,787     23,797   56,405    62,416

(Loss) income from operations    (5,653)     5,954     (606)   (6,890)

Other income, net                   418        347      896       743

(Loss) income before income
 taxes                           (5,235)     6,301      290    (6,147)

(Benefit) provision for
 income taxes                    (1,943)     2,300       25    (2,508)a

Net (loss) income               ($3,292)    $4,001     $265    $3,639

Net (loss) income per share      ($0.20)     $0.22    $0.01    ($0.21)

Weighted average number of common and
 dilutive common equivalent
 shares outstanding              16,836     18,184   17,657    17,207

Condensed Consolidated Balance Sheets
(In thousands)

                                 June 30,  December 31,
                                   1995       1994
                                (Unaudited)

ASSETS

Cash and marketable securities    $44,201    $50,695
Accounts receivable, net           23,583     33,482
Other current assets               12,887      8,694
Property, equipment and
 other assets                      26,828     22,801
Deferred tax asset                  8,693      9,288-a
   Total assets                  $116,192   $124,960

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities               $23,402    $28,419
Deffered revenue                   25,129     21,463
Other liabilities                   1,821      1,199
Stockholders' equity               65,840     73,879
    Total liabilities and
     stockholders' equity        $116,192   $124,960
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a-In the first quarter of 1994, the Company took a one-time charge of $17,606 with an associated deferred tax benefit of $6,690, resulting in an after tax charge of $10,916 related to the acquisition of Beyond.

CONTACT: Jeffrey Glidden or James Ringrose

Banyan Systems Incorporated Banyan Systems Incorporated

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