Banyan Systems Announces 1998 First-Quarter Results; Third Consecutive Quarter of Profitability is Highlighted by Accelerated Revenue Growth in Switchboard and Network Services.WESTBORO, Mass.--(BUSINESS WIRE)--April 22, 1998--Banyan Systems Incorporated (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BNYN BNYN ePresence (stock symbol; formerly known as Banyan) ) today announced its financial results for the first quarter ended March 31, 1998. For the first quarter of 1998, Banyan banyan (băn`yən), species of fig (Ficus bengalensis) of the family Moraceae (mulberry family), native to India, where it is venerated. Its seeds usually germinate in the branches of some tree where they have been dropped by birds. reported net income of $377,000, or $0.02 per share, compared with a 1997 first-quarter net loss of $6,392,000, or $0.37 per share. Revenues for the first quarter of 1998 were $17.8 million, compared with $20.0 million for the first quarter of 1997. William P. Ferry, Banyan's chairman and chief executive officer, stated, "Banyan's first-quarter financial performance demonstrates the progress we have made in stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. our core business, while increasing our investment in Switchboard and network services with are fundamental to our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth. The first quarter was highlighted by the growth of Switchboard, our majority-owned subsidiary majority-owned subsidiary A firm in which more than 50% of outstanding voting stock is owned by the parent company. , which reported revenue of $1.1 million, nearly three times the revenue it reported during 1997's fourth quarter, and the continued growth of our network services business, which grew 36 percent over last year. To further strengthen our financial position, we received a $10.0 million equity investment in March from HarbourVest Partners, one of the world's largest private equity firms. This investment is being used to support the growth of Switchboard, the expansion of our network services business and further development of our intranet software initiatives." Swithchboard Banyan's leading Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the directory subsidiary, Switchboard Incorporated, reported impressive revenue growth due to the additions of premier web advertisers and the expansion of business with its existing advertiser ad·ver·tise v. ad·ver·tised, ad·ver·tis·ing, ad·ver·tis·es v.tr. 1. To make public announcement of, especially to proclaim the qualities or advantages of (a product or business) so as to increase base. During the quarter, companies such as AT&T, Hewlett Packard and 1-800-Flowers, Inc. launched new advertising campaigns on www.switchboard.com. Switchboard continued to be the directory of choice for America On Line and Alta Vista See AltaVista. (World-Wide Web) Alta Vista - A World-Wide Web site provided by Digital which features a very fast Web and Usenet search engine. As of April 1996 its word index is 33GB in size. and maintained its position as the Internet's top directory site and on of the most frequently visited web sites overall. Additionally, Switchboard recently announced a releationship with Lycos, one of the Internet's leading search engine firms, to license its SideClick technology, an innovative, intuitive web site search tool. SideClick links will be integrated directly into Lycos search results, using a "Related Sites & Topics" button, which will enhance user searches by helping them to find related web sites. Network Services Banyan's network services reported strong growth due to increasing demand for its network support and integration services as well as its family of Year 2000 compliance capabilities. Banyan recently announced a $1.7 million network services contract with Public Service Enterprise Group (PSEG PSEG Public Service Enterprise Group ) and also initiated consulting engagements with EMC (1) (EMC Corporation, Hopkinton, MA, www.emc.com) The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. and GTE GTE General Telephone & Electronics GTE Génie Thermique et Énergie (French) GTE Gas Turbine Engine GTE Global Tropospheric Experiment GTE Geothermal Energy GTE Gas Turbine Efficiency plc (Sweden & USA) during the quarter. The Company's comprehensive Year 2000 Readiness Program continued to receive strong support from industry analysts as its full array of services were formally rolled out during the quarter. Networking Software  This article is written like a personal reflection or and may require .Please [ improve this article] by rewriting this article in an . Banyan's first-quarter networking software sales of $11.7 million reflects lower demand for the company's VINES (VIrtual NEtworking System) An earlier Unix System V-based network operating system from Banyan Systems that ran on DOS and OS/2-based servers. It provided internetworking of PCs, minis, mainframes and other computer resources providing information sharing across (R) and messaging offerings, traditional customer purchasing patterns and some purchasing delays by customers waiting for delivery of new Year 2000-compliant versions of the company's software products. Consistent with its product development and delivery schedule, Banyan began shipping VINES 8.5, its first Year 2000-compliant product, in early April and announced that the Year 2000-compliant version of its industry recognized enterprise directory. StreetTalk for Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. 8.5, will be released at the end of April. The company also continued to make progress with its suite of intranet solutions by announcing a new, enhanced version of its Intranet Connect offering and continuing to develop additional directory- and messaging-based intranet products that are scheduled to be released during the latter part of 1998. Outlook Ferry concluded, "During the second quarter, we plan to continue investing in our Switchboard, network services and intranet software initiatives in order to generate new sources of revenue. To achieve our goal for continued revenue growth in Switchboard, we will focus on expanding its advertising roster and establishing additional relationships to increase traffic to the site. Additionally, we believe that our network services business will continue to experience increased demand for network support and integration services as well as Year 2000 compliance related services. While we believe our VINES and messaging offerings will represent a decreasing percentage of revenues over time, we expect the new Year 2000-compliant versions of VINES and StreetTalk for Windows NT will be well received by our customers. Consistent with our strategy, Banyan will strive to carefully manage costs while delivering products and services that address key customer needs and major industry trends. The Company noted that each of the above forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including the statements under the heading "Outlook," was subject to change based on various important factors, including, without limitation, the plans for the Company's business, competitive actions in the marketplace, buying trends by businesses, the success of the Company's Year 2000 Readiness program and consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" , the impact of the Company's increased investment in its Switchboard, network services and intranet solutions initiatives, the ability of Switchboard to expand its revenues and the anticipated use of funds from the HarbourVest investment of which $4.0 million is subject to shareholder approval of an amendment to increase the number of authorized shares Authorized shares Number of shares authorized for issuance by a firm's corporate charter. of Common Stock. Further information of potential factors which could affect the Company's financial results are included in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. form the 1997 fiscal year, which was filed with the SEC. The consolidated statement of operations See Income statement. and condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. balance sheets are attached. -0- About Banyan Systems Incorporated: Over eight million business users, including half the Fortune 1000, depend on Banyan technology and solutions. Banyan Systems (NASDAQ:BNYN) is a pioneer and leader in providing proven, standards-based networking directory and messaging products. Coupled with professional and support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services , these unique offerings help people communicate simply and easily across enterprise networks, intranets and the Internet. Founded in 1983 and headquartered in Westboro, Massachusetts, USA, the Company markets products worldwide thorough its direct sales force, authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: network integrators, resellers and international distributors. Banyan can be reached on the World Wide Web at http://www.banyan.com. -0-
Banyan Systems Incorporated
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended
March 31,
1998 1997
(Unaudited)
Revenues:
Software $11,718 $16,378
Network services 4,955 3,643
Switchboard(a) 1,080 10
Total revenues 17,753 20,031
Cost of related revenues 4,892 5,361
Gross margin 12,861 14,670
% 72% 73%
Operating expenses:
Sales and marketing 8,196 12,982
Product development 2,847 4,728
General and administrative 1,481 3,348
Total operating expenses 12,524 21,058
Income/(loss) from operations 337 (6,388)
Other income, net 107 86
Income/(loss) before income taxes 444 (6,302)
Provision for income taxes 67 90
Net income/(loss) $377 $(6,392)
Income/(loss) per common share:
Basic $0.02 $(0.37)
Diluted $0.02 $(0.37)
Weighted average number of common
shares:
Basic 17,672 17,251
Diluted 19,880 17,251
-0-
Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
1998 1997
ASSETS
Cash and marketable securities $22,206 $10,876
Accounts receivable, net 13,496 16,960
Other current assets 4,612 4,136
Property, equipment and other assets 9,938 10,956
Total assets $50,252 $42,928
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $13,688 $15,774
Deferred revenue 17,803 18,930
Other liabilities 590 590
Minority interests in consolidated
subsidiaries 2,380 2,557
Stockholders' equity 15,791 5,077
Total liabilities and stockholders'
equity $50,252 $42,928
(a) Internet advertising based revenues from the Company's
majority-owned subsidiary, Switchboard Incorporated.
CONTACT: Banyan Systems, Inc. Richard M. Spaulding / John P. Mitchell, 508/871-2271 |
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